China fully capable of coping with deficit risks

The year 2020 will pose the biggest challenge to China since the launch of reform and opening-up. To begin with, since its GDP shrunk 6.8 percent year-on-year in the first quarter due to the novel coronavirus outbreak, China has to make unrelenting efforts during the rest of the year to achieve the goal of building a moderately prosperous society in all respects by the end of 2020.

Given the complicated economic situation, China has highlighted six requirements－guaranteeing employment, improving people's livelihoods, allowing the market to play a leading role in resource allocation, ensuring food and resources security, strengthening the industrial supply chain and safeguarding normal grassroots operations－to stabilize the economy.

To fulfill the six requirements, the government has to adopt a favorable economic policy, fiscal policy in particular. And to create more jobs, China has to boost economic growth. But the economic downturn pressure was already high, and the outbreak has now raised it further. Since it is difficult to promote growth by relying on market forces alone, the authorities should adopt proactive fiscal policy to enable the market to play a more dynamic role in boosting the economy.