China needs more active fiscal policy as pressure on economy increasing - People's Daily

According to an article by China’s Finance Minister Liu Kun published in the official People’s Daily on Thursday, there is a need for more active fiscal policy amid increasing pressure on the economy.

Key quotes

“At present, China’s economic and social development is still facing great uncertainties, and downward pressure on the economy is still increasing,”

“A more active fiscal policy is a practical need to hedge the downward pressure of the economy.”

“Further tax cuts would help companies, ensuring and expanding jobs was a top priority.”

“The coronavirus outbreak has had a huge impact on China’s fiscal revenue growth.”

“In the first quarter of this year, fiscal revenue showed negative growth, it is expected that fiscal revenues for the full year of 2020 will be lower than the previous year.”

Markets are expecting the government to announce a new stimulus package soon to cushion the economy hit hard by the coronavirus outbreak. The stimulus package could likely come before the annual National People’s Congress (NPC) session that starts on May 22.

Market reaction

The above comments have little to no impact on the market sentiment, as it remains driven by the US-China trade tensions, second virus wave fears and rising economic damage worldwide.

The Asian equities trade mostly lower while USD/JPY keeps lows near 106.85. The AUD/USD pair nurses losses led by disappointing Australian jobs data. The spot drops 0.26% to trade near 0.6440.