July 22, 2015 / 11:52 AM / 4 years ago

China Vice Finance Minister promises 'pro-active' fiscal policy

Chinese President Xi Jinping arrives to the Shanghai Cooperation Organization (SCO) summit in Ufa, Russia, July 10, 2015. REUTERS/BRICS/SCO Photohost/RIA Novosti

BEIJING (Reuters) - China will pursue a “pro-active” fiscal policy to stabilize investment growth and boost domestic consumption in the world’s second-largest economy, a vice finance minister said on Wednesday.

Liu Kun was quoted as saying on the Finance Ministry’s website that an active fiscal policy was part of six crucial areas that the ministry was focused on, alongside lifting growth in investment and consumption.

Other priorities were helping companies to move up the production value chain, strengthening environmental protection controls, accelerating the development of logistic networks, and deepening reforms of food and agricultural product subsidies.

A “pro-active” fiscal policy stance in China is widely understood to mean increased government spending.

Finance Minister Lou Jiwei had said in March that China’s fiscal deficit could widen from last year’s 2.1 percent of gross domestic product to 2.7 percent this year, as authorities step up efforts to lift flagging economic growth.

Buffeted by a housing downturn and cooling growth in investment, factory output and lukewarm domestic and foreign demand, China’s economy is forecast by many analysts to grow by 7 percent this year - which would be its slowest rate in a quarter of a century.

Reporting by Koh Gui Qing; Editing by Simon Cameron-Moore

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