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China controls valve to ensure currency stability

The just-concluded Central Economic Work Conference proposed that "fiscal policy should be more active and effective, and monetary policy should remain stable and neutral", and emphasized the need to focus on dealing with "zombie companies" in order to deepen supply-side reforms. In this regard, Liu Ying, a researcher at the Chongyang Institute for Financial Studies of Renmin University of China, said in an interview with Ta Kung Pao on the 17th that US President-elect Trump announced that he would take a series of economic measures after taking office, which will bring a lot of uncertainty to the global economic trend, which will not help the global economy. Therefore, the economic policy proposed by the Central Economic Work Conference is intended to strengthen government guidance and effectively control the monetary adjustment valve, so as to respond to changes in the international economic situation, including the US Federal Reserve's interest rate hike.

The meeting communiqué stated that "fiscal policies should be more active and effective, and budget arrangements should be adapted to the needs of advancing supply-side structural reforms, reducing corporate tax burdens, and ensuring people's livelihood." In this regard, Liu Ying said that this means that while the national fiscal policy will play a positive role next year, it must be more targeted and effective. Liu Ying said that Trump announced that he would reduce the corporate tax from 35% to 15% after taking office, which will definitely cause a certain "siphon" effect on global investment. Therefore, China will drive economic growth through more active government guidance next year. Specifically, the government is expected to take a series of measures such as reducing the tax burden.