China could run its biggest budget deficit in perhaps half a century next year as leaders turn to government spending to arrest the slowdown in the economy, policy advisers say, after a year of easing monetary policy has brought disappointing results.
The government is expected to increase its budget deficit to about 3 percent of gross domestic product in 2016 from a target of 2.3 percent this year to help cushion against the possible economic impact from structural reforms, the advisers said.
The sources, who prepare advice for senior leaders but are not involved in final policy decisions, said a bigger deficit, as a counter to the expected pain from plans to tackle oversupply and debt, was among recommendations that were made to leaders at a recent meeting that set the economic agenda for next year.