BEIJING - Raising the budget deficit ratio and cutting taxes are necessary to combat downward economic pressure, according to China's vice finance minister.
The government must expand its spending and lower investment and operation costs for businesses to boost growth, vice finance minister Liu Kun was quoted as saying in "China Economic and Financial News" on Thursday.
China will gradually raise its fiscal deficit ratio, increase government debt issues and set a limit on new local government debt, according to Liu.
China raised its fiscal-deficit-to-GDP ratio to 2.3 percent for 2015, compared with 2014's target of 2.1 percent, with the number expected to rise to 3 percent or more in 2016.
A 3-percent deficit ratio is normally considered a red line not to be crossed, but a higher ratio enables the government to cut taxes, encouraging production.
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