China’s central bank adviser Huang Yiping states that there is considerable policy space for stimulating economic growth in 2023. Fiscal measures have been introduced to target a growth rate of around 5%, while reforms to boost consumption are also emphasized. The Boao Forum provided a platform for discussing these economic strategies amid challenges such as global trade tensions.

Huang Yiping, an advisor to China’s central bank and a professor at Peking University, asserted that China has considerable policy space to stimulate its economy this year. Speaking at the Boao Forum, he emphasized that while fiscal measures have been introduced, further reforms are necessary to enhance consumption. The government has increased its annual budget deficit and committed to potential interest rate cuts.

The central government aims for an economic growth target of approximately 5% this year. Huang noted that macroeconomic policies can address cyclical issues, while structural reforms will tackle longer-term challenges. To improve consumption levels, he highlighted the importance of reforms that elevate income and confidence amongst the populace.

Peng Sen, chairman of the China Society of Economic Reform, advocated for increasing consumption as a percentage of GDP to 70% by 2035, from the current 55%. He underscored the need for extensive structural reforms in institutional frameworks, income distribution, and taxation systems to effectively drive spending.

The Boao Forum, regarded as Asia’s counterpart to the World Economic Forum held in Davos, is taking place in Hainan Province this week. Policymakers are prioritizing domestic demand, particularly consumption, to mitigate the adverse effects of tariffs imposed by the United States on Chinese exports. Huang expressed concern that globalization, which has benefited many Asian economies, including China, is at risk of reversal due to geopolitical factors.

In summary, China possesses significant policy flexibility to foster economic growth this year, as indicated by Huang Yiping. Crucial reforms aimed at boosting consumption alongside fiscal policy adjustments are necessary for achieving the stated growth targets. The insights shared during the Boao Forum highlight China’s commitment to enhancing its economic structure and addressing the challenges posed by international trade dynamics.

Original Source: money.usnews.com

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