BEIJING (Reuters) - China’s vice finance minister Zhu Guangyao said China’s fiscal policy will remain proactive going forward, but added that deflationary pressure is not as intense as in Europe.
The minister made the comments at the opening of the Chinese People’s Political Consultative Conference (CPPCC), an advisory body to the country’s parliament.
The finance ministry is forging ahead with fiscal reforms in a bid to deal with the root cause of local government debt piles that have amounted to more than $3 trillion.
Li Daokui, a former adviser to the central bank’s monetary policy committee also in attendance, told reporters that deflationary pressures were not very big, and that downward pressure was not the “most important issue.”
“The key issue is whether we can find new bright growth spots through reforms this year that can be sustained,” Li said.
The economy grew 7.4 percent in 2014, its slowest expansion in 24 years. At the opening of the annual parliament meeting on Thursday, Premier Li Keqiang is expected to cut this year’s growth target to around 7 percent from 7.5 percent in 2014.
The central bank cut official interest rates on Saturday, ahead of the annual meeting of parliament, the latest effort to support the economy as its momentum slows.
Zhu also said the government was still studying the implementation of a property tax, seen as a potential way to wean indebted local governments off of their dependence on land sales for revenues.
He also said the Asian Infrastructure Investment Bank, Beijing’s planned alternative to other global infrastructure banks such as the Asia Development Bank and the International Monetary Fund, will definitely be established within this year.
Reporting by Koh Gui Qing and Kevin Yao; Editing by Pete Sweeney and Jacqueline Wong