Will China’s top legislature give the green light to a fiscal stimulus package?

The Standing Committee of the National People’s Congress (NPC), China’s highest legislative body, will will meet in Beijing on Monday to discuss a wide range of issues. Among them is likely to be a major fiscal stimulus, recommended by several prominent economists and eagerly awaited by investors.

While markets are speculating about potential size of the fiscal package – with estimates ranging from 2 trillion yuan ($280.66 billion) to 10 trillion yuan – we’ve rounded up some basic facts about the upcoming session, how they’ll approve such a stimulus and when the public is likely to know about it.

How are legislative power and incentives related?

China’s Ministry of Finance under the State Council, the country’s cabinet, usually submits the budget for approval to the NPC during annual legislative session in Marcha necessary step before implementation.

The NPC Standing Committee, which exercises legislative powers outside of full session, has the authority to approve any adjustments to government budgets during the fiscal year, including changes to the annual budget deficit ratio, the special treasury bond quota and the cap on local governments. debt levels.

Traditionally it meets every two months, often at the end of even-numbered months. There were exceptions to this informal custom; the upcoming conclave will take place in November, and the previous meeting this year took place in mid-September.

The agenda of the November meeting did not include bills related to the Ministry of Finance, as well as budget plans. However, this does not mean that it cannot happen: in a number of cases, budget adjustments were announced after the fact.

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Will China’s top legislature give the green light to a fiscal stimulus package?

How are legislative power and incentives related?

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