China’s record-high fiscal deficit remains in a safe range and the government has plenty of ammunition to arrest downward pressure on the economy, according to a senior government researcher.
The 3 percent deficit ratio is within a safe margin compared with countries such as the United States and Japan, and European nations, Huang Shouhong, deputy director of the State Council Research Office, said at a press conference on Saturday, according to a webcast posted on the State Council Information Office website.
The government has refrained from using mass quantitative easing policies and instead pursued structural reforms, which have stabilized growth and left room for dealing with risks and challenges this year and in the future, Huang said. The country’s fiscal deficit will increase to 3 percent of GDP this year, the highest level ever, from 2.3 percent in 2015, according to the official Xinhua News Agency.
"The Chinese government still has enough innovative policy tools to battle the downward pressure," Huang said. "With enough weapons and bullets, we can fire whenever we need."
The government pays high attention to potential risks, such as bad-loan ratio increases, and many financial regulators have also taken specific measures to cushion against the risks, he said. China’s financial system is sound overall, although the overuse of some financial tools could cause certain risks, according to Huang.
— With assistance by Hui Li