Will China's top legislature greenlight a fiscal stimulus package?

The Standing Committee of the National People’s Congress (NPC), China’s highest legislative body, will do so meeting in Beijing on Monday to discuss a wide range of topics. A large fiscal stimulus, recommended by several leading economists and highly anticipated by investors, will likely be part of this.

While the markets speculate about the potential size of a budget package – with estimates ranging from 2 trillion yuan ($280.66 billion) to as much as 10 trillion yuan – we’ve gathered some basic facts about the upcoming session, how they would approve such a stimulus, and when the public is likely to find out.

How are the legislature and incentives linked?

China’s Ministry of Finance under the State Council – the country’s cabinet – usually submits the budget to the NPC for approval during the annual legislative session in Marcha necessary step before implementation.

The NPC Standing Committee, which exercises legislative power outside the full session, has the authority to approve any adjustments to government budgets within the financial year – including changes to the annual budget deficit ratio, the special government bond quota and the ceiling for local governments . debt levels.

Traditionally it meets every two months, often at the end of even-numbered months. There have been exceptions to this informal custom; the upcoming conclave will sound in November, and an earlier meeting this year took place in mid-September.

The agenda for the November meeting did not include any bills related to the Ministry of Finance or budget plans. However, this does not mean that this cannot happen: budget adjustments have been repeatedly announced afterwards.

03:49

Xi’s rally cry sets economic priorities for Chinese officials and absolves them of mistakes