The central government is expected to try to counter economic headwinds with a more progressive fiscal policy, possibly by allowing a higher ratio of debt to gross domestic product.
The expectations follow comments earlier this month by Vice-Finance Minister Zhu Guangyao, who has questioned whether fiscal restrictions derived from European Union standards more than two decades ago are still relevant today.
These benchmarks call for a deficit/GDP ratio of 3 per cent and a debt/GDP ratio of 60 per cent. “Rigidly” sticking to the concepts did not help reform or growth, Zhu told a financial summit hosted by Caixin in Beijing.
Leaders are due to meet next month for the annual Central Economic Working Conference, where they will set policy directions for 2016.
Li Ruoyu, an economist with the State Information Centre, an official think tank, said there was room to expand the fiscal deficit ratio next year to about 2.5 per cent. That is higher than the 2.3 per cent this year and last year’s 2.1 per cent.