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<Research>CICC Predicts CN Fiscal Focus to Shift from Infra to Livelihood Investments
CICC has released a report stating that the contradiction of insufficient demand is prominent in the second half of China's financial cycle. At the end of September this year, ...
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<Research>CICC Predicts CN Fiscal Focus to Shift from Infra to Livelihood Investments
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CICC has released a report stating that the contradiction of insufficient demand is prominent in the second half of China's financial cycle. At the end of September this year, the Central Political Bureau meeting further released positive policy signals along with multiple policies announced by the State Council Information Office, to which the market responded positively.

CICC believes that strictly regulating new debt, accelerating the replacement of local outstanding debt, and resolving corporate debt arrears will help alleviate the burden on relevant entities and stimulate economic vitality. Against the backdrop of reduced space for traditional infrastructure, shifting fiscal expenditure focus from infrastructure investment to livelihood will aid in fortifying fiscal quality and efficiency.

CICC pointed out that there is still considerable room for China's livelihood expenditure overall. The scope of livelihood is relatively broad, mainly considering education, health, and social security. One scenario is that if referring to the three major livelihood situations (education, health, social security, etc.) when the US and South Korea reached the stage of moderately developed countries, the broker estimated that the space from 2025 to 2035 can rise around RMB1.4 trillion annually based on the previous year (valued at 2023). Another scenario is that if referring to the fitting line of more than 20 economies, the broker estimated that the 2023 livelihood field space is about 4% of GDP.

In order to boost actual economic growth by one percentage point, for example, it may require a net increase in livelihood expenditure of RMB1.3-2 trillion without considering other policies.

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