Thread by @ChinaFinance40

#China’s fiscal approach amid ongoing external economic &trade uncertainties:
1. Maintain steady growth of “broad #credit”-the sum of debts&loans to residents, firms & govts, which not just creates #debt but also financial assets which can help increase purchasing power.

2. Currently, the #credit and loan growth out of general govt spending and local govt financing platforms is a main stabilizer of #China’s #macroeconomic growth.

3. More “special #bonds” should be issued to support #infrastructure investments that generate low cash flow and are less profitable, meanwhile clarifying the #market-government boundary.

4. Boost consumer spending with fiscal measures while reducing subsidies to producers which can improve the efficiency of resource allocation.
mp.weixin.qq.com/s/97k211PnKjTx… #economics

5. Although #China has a large #infrastructure scale, the contents and deployment of infrastructure investments throughout the nation should be further improved.

6. Hidden #debts of local governments and local financing platforms which are least sustainable and are not supported by enough cash flow should be managed properly to avoid their damage to the whole #financal system.

7. One approach to dealing with these hidden debts is to identify which part of them could generate reasonable cash flow so that could be handed over to the #market, and which part are public/quasi-public and should be taken over by government.