China has ample room to expand borrowing, boost public investment: expert

Amid external economic challenges, China still has ample room to expand borrowing and increase investment in livelihood-related sectors to stimulate growth and boost consumption, a Chinese expert said.

Zhang Bin, deputy director of the Institute of World Economics and Politics at the Chinese Academy of Social Sciences, underscored China's significant achievements in infrastructure development, but emphasized that there remains considerable potential in sectors related to people's livelihoods.

"China has made remarkable progress in areas such as railways, roads, airports, and industrial support facilities, with the development in many of those areas even surpassing those in some developed countries. However, when it comes to public investment in livelihood-related sectors, such as libraries, museums, and sports venues, our per capita levels remain relatively low, amounting to just one-fifth to one-tenth of those in high-income countries. Meanwhile, there is also room for improvement in the public infrastructure of metropolitan areas, particularly in urban-rural fringes, where many people live but still lack adequate public services and facilities. If we focus investment on areas that directly impact people's well-being, there is still vast development potential," said Zhang.

According to the government work report approved in March, China has set its general public budget for 2025 at 29.7 trillion yuan (about 4.07 trillion U.S. dollars) , an increase of 1.2 trillion yuan (about 160 billion U.S. dollars) over the previous year. More than half of the budgeted spending will be allocated to livelihood-related areas such as employment, basic medical and health services, and social security.

Zhang further noted that China has ample room to increase borrowing to support such investments, which would, in turn, help raise household incomes and stimulate consumption.

"First, we need to recognize that the Chinese government's debt level is still relatively low compared with developed countries," said Zhang.

"Many developed economies are already grappling with high inflation, leaving them little space to cut interest rates or expand borrowing. In contrast, China's inflation remains low, indicating that increased government borrowing and spending would not pose significant inflationary risks. Moreover, China has a high saving rate and Chinese people tend to save a significant portion of their income. At the same time, the interest rates in China are at a low level, which means our debt paying ability is stronger than before, and there is more space to expand borrow. In such a context, government borrowing can drive corporate profits, boost tax revenues, and raise household incomes, ultimately stimulating overall purchasing power and revitalizing the economy," said Zhang.

China has ample room to expand borrowing, boost public investment: expert

China's National Development and Reform Commission (NDRC) will work with relevant departments and local authorities to take concrete steps to promote the implementation of the newly passed private sector promotion law, a landmark legislation concerning a vast economic force in the country, said an NDRC official.

China's top legislative body -the National People's Congress - passed the private sector promotion law on Wednesday, establishing a legal backing for the steady and healthy growth of the key sector, including more than 57 million private firms and over 100 million self-employed individuals.

This landmark law is China's first fundamental legislation dedicated to the private sector. It will bolster confidence among the vast community by improving the business environment, fostering innovation, and ensuring fair competition, according to NDRC, the country's top economic planner.

"The private sector promotion law has actively responded to the key concerns in the development of the private sector. Efforts are made to establish and improve relevant systems and enhance the enforceability of the systems, from ensuring fair competition, improving investment and financing environment, supporting technology innovation, focusing on regulated operation, optimizing services and guarantees, and improving rights and interest protection, to strengthening legal accountability, so as to ensure that all forms of ownership can equally utilize production factors by the law, participate in market competition fairly, receive equal legal protection, further unleash their complementary advantages, and pursue common development," said Liu Min, deputy director of Private Sector Development Bureau under NDRC.

Liu added NDRC will continue to work together with relevant departments and local authorities to improve supporting systems and mechanisms and take concrete steps to promote the implementation of the private sector promotion law.

"We will make continuous and increasing efforts to remove barriers to market access and to fair competition, to address the issue of overdue payments to private enterprises, to protect the lawful rights and interests of private businesses and entrepreneurs by the law, to implement various relief policies, to help private enterprises shoulder their responsibilities of the era, so as to help translate legal systems into concrete actions and tangible outcomes that promote the high-quality development of the private sector," said Liu.

Concrete steps to take for firmly implementing China's landmark private sector promotion law: official