BEIJING, March 10th (AMSP/CGTN) – – This year’s China government work report vows to increase support for small and medium-sized high-tech companies, including unicorns and a newly mentioned term – “gazelle companies.” The government also aims to attract more private capital to invest in national-level infrastructure projects. What impact will these private sector-friendly policies have on China’s overall economy? And what other signals did the government work report send out? Reporter Wang Tianyu spoke to Raymond Yeung, the chief Greater China economist of one of Australia’s four biggest banks – ANZ, to learn more.
“I think overall these clearly reflect that the Chinese government wants to support tech development in the economy and also pay close attention to the role of private sector in the technological improvement. It’s clearly that what happened in the last few months, especially after DeepSeek, and many others new startups, made success that has boosted confidence that China is still a very important source of innovation globally. So I think this is the right direction,” Raymond Yeung told CGTN’s Wang Tianyu.
As the deficit to GDP ratio is set at four percent, which is the highest level in history, Reporter Wang wanted to know why Raymond Yeung thinks the Chinese government has raised it up to four, and what is the purpose behind this move.
“I think the four-percent official fiscal deficit reflects that the government will be very proactive in terms of the fiscal policy support. This year, having 100 basis point more of fiscal deficit means that the government will try to rely on the recent positive momentum of the economy and to secure the growth momentum going forward. Now, obviously, the question is not how much the governments are willing to spend to the economy, but also how they’re going to use the money is more important. So I think that my focus is not just about whether this is four percent or five percent or three percent. It is more about how the government is going to use the money. And is it willing to execute different type of infrastructure projects, consumption support, and or even other measures to offset some of the external head winds from very uncertain global environment. I think this means more to me than the number itself,” the chief economist pointed out.
China will issue a total of 1.3 trillion yuan in ultra-long special treasury bond this year. Reporter Wang asked him if the issuance and the scale of funds are in line with your expectations.
“I think the issue of 1.3 trillion [yuan] of ultra long bond is in line with our expectation. We do believe that in the future, this type of ultra long bond or extending the duration of bond issue will be a new normal. That will be a very consistent strategy considering the China industrial development, because much of the development is about the long term benefit to the economy. So China also need to extend the duration so that more projects can be funded,” Raymond Yeung replied.
For the first time, the government work report has emphasized stabilizing the real estate market as part of its overall policy framework. “Have you seen any sign of recovery in China’s real estate sector yet?,” Wang asked.
“In the last few months, we have seen some improvement in some cities in terms of the property prices. Under this 70 cities, real estate index, we’ve seen more city reporting positive month on month improvement in property prices. Now I would regard these as green shoot, but more need to be done to sustain the improvement in momentum. At this stage, it is still too early to conclude that the property market is recovering. I would see that is a year of stabilization in the real estate market. Hopefully, that would be less contraction in property investment and also some improvement in property price in certain cities. We need to wait for perhaps one or two years to have a broad recovery or real estate price, also a sustained effort for the local government to execute the central government mandate to stabilize property price. I think we will be able to see some improvement especially in the second half of this year,” the Chief Economist of Greater China
ANZ said
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