China Can Widen Deficit to Support Economy, Former Finance Chief Says

(Bloomberg) — China can consider increasing its budget deficit to provide more support for small businesses battered by Covid outbreaks and weak consumption, a former finance minister suggested on Saturday.

“The budget fiscal deficit of central and local governments can be increased when necessary,” Lou Jiwei, who served as finance minister from 2013 to 2016, told the Caixin Summer Summit in Beijing. The aid to small firms “is still insufficient due to a severe slump in fiscal income across local governments,” he said.