Hugues Chevalier, Economist
With the continuing slowdown of the Chinese economy, the GDP ‘natural’ increase would not reach 6% in 2020, but most probably 5.5%. However, this topic has been on the agenda of the yearly economic conference of the government which set the objectives for the following year. Then, the government wants to maintain the 6% momentum with a new fiscal plan and refuses a decrease at 5.5%. According to the newspaper China Daily, this new plan has been endorsed by president Xi Jingping and will be based mainly on new fiscal rebates for both households and corporates for a total of CNY 3000 billion (CHF 420 billion). As a consequence, the public deficit of the central government would reach 3% in 2020 (against 2.8% in 2019) and that of the provinces 4% (against 3.5%). The provinces will be able as well to issue bonds for a total of CNY 3000 billion in order to boost transportation investments.