Abstract: At the press briefing on October 12, the Ministry of Finance announced four upcoming incremental fiscal policies, clearly signaling that the central government is willing to assist local governments in addressing short-term revenue and expenditure imbalances and resolving debt risks. Additionally, the central government is actively studying fiscal policies for 2025, though these policies are still in the process of development and approval.
The CF40 Research provided the following comments on the press briefing: First, hitting the 5% economic growth target for the year does not require additional incremental fiscal funding; the key is to spend the debt funds promptly within the year. Second, the central government’s policy of local hidden debt swap could reach a scale of 2 trillion yuan per year. Third, the framework and direction of fiscal policy remain stable, with no significant changes, and should not be interpreted as a “whatever it takes” approach. Fourth, maintaining reasonable economic growth will still require central government fiscal supports, as the central government has significant borrowing capacity and considerable borrowing needs.
