Chinese Premier Li Keqiang said fiscal funds should be used to redevelop shantytowns and improve basic infrastructure as part of efforts to stabilize the world’s second-largest economy.
Money should also be allocated to transform the structure of the economy to focus more on domestic consumption, the State Council, or Cabinet, said in a statement on its website yesterday, after a meeting led by Li.
Recent economic data signal the nation’s growth slowdown may be deepening. China’s service industries expanded at the slowest pace in nine months in June and two manufacturing indexes declined last month, according to data this week. Banks including Goldman Sachs Group Inc. have pared their growth projections this year to 7.4 percent, below the government’s 7.5 percent goal disclosed at the March conference at which Li became premier.
The government yesterday also approved a trial plan to set a free trade zone in Shanghai to boost the economy and deepen reforms.
Shanghai, China’s financial hub, plans to set up a pilot free trade zone in the Pudong district this year, the first of its kind on the mainland if approved, the official Xinhua News Agency reported in January. The zone would encourage cross-border financing and international trade settlement.
China already has a financial zone in the Qianhai district of the southern city of Shenzhen. The National Development and Reform Commission said last year companies there will be encouraged to sell yuan-denominated bonds in Hong Kong and to experiment with cross-border loans in the Chinese currency.
— With assistance by Bonnie Cao