Market News International:
Some media reports suggest that no special local government bonds can be directed to the real estate sector or land development. Is that true? If so, how will the shanty town renovation projects get funds this year? Will funds for shantytown renovation projects be significantly cut? Could you also elaborate on the specific use of special treasury bonds?
Xu Hongcai:
Thank you for your questions. The renovation of shantytowns is a major project related to people's livelihood and China's development. In line with the decision of the CPC Central Committee and the State Council, local governments have promoted renovation in recent years with great efforts and have made remarkable progress. Many residents in rundown areas have moved into apartment buildings. Some qualified projects have been completed across the board through years of efforts, while some are still face difficulties.
In 2020, local governments are supposed to follow the central requirements of reigning in the property sector, control the scope and standards of shantytown renovation, strictly evaluate the financial bearing capacity and settle the annual tasks of renovation in a scientific way. Local authorities need to avoid making one-size-fits-all renovations, setting impractical targets and blindly resorting to loans. It is necessary to focus on shantytowns in poor environments in old urban areas, as well as in state-owned industrial, mining, forest and reclamation areas. The Central Government has clarified that special local government bonds should not be used for land acquisition or stock and real estate-related projects in line with the requirements proposed at the 2019 Central Economic Work Conference on renovation of existing residential projects and old urban communities. With coverage adjusted, special local government bonds will support the renovation of old urban communities. Amid the current macroeconomic situation, the government will promote the construction of projects that can be started soon and produce tangible results to ensure the steady completion of work and effective investment.
You also mentioned the issuance of special treasury bonds. Since the beginning of the year, the COVID-19 epidemic has exerted phased impacts on China's economy and added to downward pressure. As the pandemic spreads across the world, global economic and trade growth has been severely impacted, forcing China's economic development to face new challenges. To effectively cope with the impact of the epidemic and improve the adjustment and implementation of macroeconomic policies, the government has pledged to moderately increase the fiscal deficit rate and issue special treasury bonds this year, along with the CPC decision, to deliver positive and clear signals to society, boost market confidence and ensure the realization of annual economic and social development targets. A deficit rate increase and the issuance of special treasury bonds need to go through legal procedures. The State Council will submit them to the National People's Congress for review and approval. The specific plans will be settled based on the domestic and international economic situation, the demands for national macroeconomic adjustment and control, and fiscal revenue and expenditure. Thank you.
Hu Kaihong:
That is the end of today's press conference. Thank you.
Translated and edited by Hu Fan, Ji Jing, Li Fangfang, Li Nan, Li Xiaoyang, Ma Miaomiao, Wang Jun, Yan Wei, Zhang Shasha and Rebeca Toledo. In case of any dispute over a discrepancy, the Chinese version is deemed to prevail.
