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Can a mini stimulus boost GDP growth?

Updated: 2014-04-14 07:13
By Wang Yupeng ( China Daily)

China has set a GDP growth target of 7.5 percent for 2014, but because of the economy's weaker-than-expected performance in the first quarter of this year, many institutions have lowered their annual growth forecast for the country. It seems the 7.5 percent growth target is too ambitious to meet.

Addressing the Bo'ao Forum opening ceremony on April 10, Premier Li Keqiang ruled out the possibility of short-term massive stimulus policies even if the economy falters. Li's statement demonstrates China's determination to push through economic reforms even at the cost of a moderate slow-down. But it also indicates that the government may work a mini-stimulus package to achieve the growth target.

In fact, on April 2, Li presided over a State Council executive meeting, which announced three major pro-growth initiatives, including tax breaks for small and micro enterprises, greater support for the redevelopment of run-down urban areas and investment and financing reforms in railways. This shows that the fiscal policy has finally begun to play its role and the three major pro-growth initiatives will become the pillars of this round of targeted mini stimulus.

Can a mini stimulus boost GDP growth?

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