China May Gradually Exit Proactive Fiscal Policy, Jia Says

China is likely to exit proactive fiscal policy gradually, said Jia Kang, head of the Ministry of Finance’s research institute.

Jia denied a report by Xinhua News Agency earlier today that cited him as saying at a conference that China may shift fiscal policy to “prudent” from “proactive” at year-end.

“The most likely outcome is a gradual exit” because proactive fiscal policy won’t be China’s normal practice, Jia said, adding that there is no timeframe for the shift.

China has eased off stimulus measures that shielded the nation from the global financial crisis by raising interest rates and officially shifting to a tighter, “prudent” monetary policy this year.

The nation’s description of its fiscal policy as “proactive” started when the Cabinet announced a package of emergency measures to protect growth in November 2008.

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