Stock - China economy
China may need to set a budget deficit target at above 3% of gross domestic product next year. Image Credit: AP

Beijing: China vowed to expand fiscal spending “appropriately” next year while “optimizing” policy tools including fiscal deficit and special debt as part of efforts to support the nation’s key strategic development.

Government investment will play a stronger role in leading private investment, boosting consumption and stabilizing foreign trade and investment, according to a statement posted on the Ministry of Finance’s website Thursday.

“In 2023, a proactive fiscal policy should be strengthened to improve its effectiveness and play a more direct and effective role,” it said, citing minutes from a nationwide virtual meeting of finance officials chaired by minister Liu Kun.

Tax support will be either extended or optimized next year, in order to provide more relief to companies, it said, without elaboration.

China’s broad fiscal deficit hit an all-time high in the first three quarters of this year as Covid outbreaks and a housing market slump continued to erode government income. The country may need to set a budget deficit target at above 3 per cent of gross domestic product next year, as it strives to improve its economic performance , former Finance Minister Lou Jiwei said on Sunday.