MNI China Press Digest March 9: Growth, Fiscal, FX Reserves

MNI (BEIJING) - Highlights from Chinese press reports on Monday:

• Achieving this year’s GDP growth target of 4.5–5% will require arduous efforts amid external uncertainties and the difficulties of economic transformation, wrote Guan Tao, global chief economist at BOC International, in an article published by Yicai.com. It cannot be ruled out that external demand’s role in driving economic growth will weaken or even turn negative this year, given limited room for further expansion after the country’s trade surplus exceeded USD1 trillion. In 2025, domestic demand contributed 3.37 percentage points to the 5% growth rate, with 2.6pp from consumption and 0.77pp from investment, while external demand contributed 1.64pp, he added.
• China’s broad deficit ratio is set at 8.1%, roughly in line with 2025’s 8.5% but still significantly higher than the 6.7% and 6.6% recorded in 2023 and 2024, balancing the need for economic stability and fiscal sustainability, Yicai.com reported citing Luo Zhiheng, chief economist at Yuekai Securities. Luo noted that fiscal policy has maintained flexibility in recent years, as authorities can increase borrowing to supplement fiscal resources by adjusting the budget and using remaining local government debt quotas to expand investment further when necessary. Yuan Haixia, director of the Research Institute at China Chengxin International Credit Rating, said the total scale of new government bonds is CNY13.9 trillion, about CNY30 billion more than in 2025. The increase is relatively restrained, given that an additional CNY500 billion of local government bonds were issued in Q4 last year to support major project construction and settle government arrears to enterprises, Yuan said.
• China’s foreign exchange reserves stood at USD3.4 trillion at the end of February, up USD28.7 billion from end-January, a 0.85% increase, Securities Daily reported, citing data from the State Administration of Foreign Exchange. The rise reflected mixed performance in global asset prices following a decline in long-term U.S. Treasury yields and a rise in the U.S. dollar index amid escalating geopolitical tensions, the newspaper said, citing Wen Bin, chief economist at China Minsheng Bank. Exports will continue to play a fundamental role in stabilising cross-border capital flows, supported by the country’s diversified trading partners, an upgraded export structure and the rapid development of new trade formats, Wen said.