Source: Global Times Published: 2018-7-18
As economic uncertainty increases, China's fiscal policy needs to inject certainty into the economy and social development, safeguarding the country's deepening reform, an expert said.
On Tuesday, Liu Shangxi, head of the Chinese Academy of Fiscal Sciences, published an article in Economic Information Daily, where he said that during uncertain times, when economic growth is shifting gears, fiscal policy should be a "stability anchor" and take a more proactive stance toward potential future problems.
Fiscal policy must also propel supply-side structural reform and ensure that risk-prevention measures are effectively implemented, Liu said in the article.
To serve supply-side structural reform, the country needs a more proactive and innovative fiscal policy, which requires three changes to the current policy, Liu noted.
"We should change the quantity-based fiscal policy to a structural one," he said, adding "the economic, industry, regional and allocation structures all need to be adjusted."
"Fiscal policy needs to expand its focus from only the economy to the entire society. Fiscal policy is social policy as well," Liu said.
He also pointed out the current fiscal policy focuses on macroeconomic control, which is about preventing and resolving short-term risks. But recognizing and tackling long-term risks is also very important.
Also, Wu Xiaoqiu, vice president of Renmin University of China, commented on the online policy debate between the People's Bank of China (PBC), the central bank, and the Ministry of Finance (MOF), saying that the PBC had done its best and the MOF could do better, according to domestic news site sina.com on Wednesday.
Officials from the PBC and MOF have been trading blame since last week, with officials from the central bank saying that China's fiscal policy is not active enough and lacks systemic methods to tackle long-term problems such as the growing gap in national pensions.
An official from the finance ministry has rebutted the accusations, saying financial institutions are an "accomplice" in the mounting local debt.
Wu Xiaoqiu is vice-president of Renmin University of China and director of the university`s Finance and Security Institute.