China post-coronavirus recovery must be ‘effective and sustainable’, with an eye on quality long-term risks
- Consolidation of post-pandemic recovery ‘must consider risk prevention amid fiscal constraints’, top think tank says
- Economic development needs to shift focus to long-term goals such as enhancing human capital, rather than rapid growth
China’s fiscal policy is at a turning point and Beijing must shift focus to long-term development, such as enhancing human capital to boost international competitiveness, rather than prioritising short-term growth, the country’s top think tank said on Wednesday.
The Chinese Academy of Social Sciences (CASS) said in its “blue book” report on the economy that authorities should give more weight to medium and long-term goals, while steering clear of the old playbook of investing in infrastructure projects.
“When consolidating the post-pandemic recovery, we must consider the risk prevention amid fiscal constraints, and make fiscal policy more effective and sustainable,” said Shi Yinghua, the book’s co-author who leads macroeconomic research at the state-backed academy.
“The key for fiscal policies in 2021 is to stabilise the expectation of market entities and residents,” she added at a seminar to mark the report’s release.
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CASS’s recommendations, which often reflect the prevailing mood in Beijing, mark a change in tone from last year, when the People’s Bank of China (PBOC) and the finance ministry joined hands to pump trillions of yuan into the economy to offset the economic shock of the coronavirus pandemic.