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China’s parliament is set to convene a crucial meeting from November 4 to 8, according to state media reports. Investors are eagerly awaiting announcements from the standing committee of the National People’s Congress, which is expected to unveil details regarding potential fiscal stimulus measures.

During last year’s meeting in late October, the committee oversaw a rare increase in China’s fiscal deficit to 3.8%, up from 3%. This parliamentary gathering plays a pivotal role in the decision-making process for adjusting the national budget or deficit. Bruce Pang, Chief Economist and Head of Research for Greater China at JLL, emphasized the need for more fiscal support based on recent stimulus measures in China.

Finance Minister Lan Fo’an recently indicated that there is room to increase the deficit and release more bonds. This follows a high-level meeting in late September led by President Xi Jinping, which called for bolstering fiscal and monetary policies. The upcoming parliamentary meeting is expected to reveal details on budget adjustments and potential bond issuances.

Analysts have tempered expectations of large-scale fiscal stimulus directly boosting consumption, instead highlighting potential support for struggling local governments. China’s economy expanded by 4.8% in the first three quarters of the year, slightly slower than the 5% growth rate in the first half. Beijing aims for around 5% economic growth for the entirety of 2024.

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