China's finance minister hinted at increasing the deficit in a highly anticipated briefing

BEIJING – China's Finance Minister Lan Foan told reporters during a highly anticipated press briefing on Saturday that there is room to increase the central government's debt and deficit.

He emphasized that the room for deficit growth is “rather large,” but noted that such policies are still under discussion, according to a translation by CNBC in Chinese.

Economists have stressed that China needs additional financial support, but Beijing has yet to make any announcements. In the days leading up to the briefing, many investors and analysts had expected China to be preparing to unveil a major new stimulus package.

Lan indicated that the weekend briefing is not over, that more stimulus is on the way and that the debt or deficit changes that markets are waiting for could come in the near future. It remains unclear whether the size of any such stimulus will meet market expectations, or how much will go directly to consumption or real estate.

“These policies are on the right track,” Zhiwei Zhang, president and chief economist at Pinpoint Asset Management, said in a note on Saturday. He added that more details are needed to assess the impact of such policies on the macro outlook and “that will be the focus of the market [the] coming month.”

The Finance Ministry on Saturday outlined policy measures focused on tackling local government debt problems, stabilizing real estate and supporting employment.

Regarding real estate, the Finance Ministry will allow local governments to use special bonds for land purchases and affordable housing subsidies for existing housing inventory, rather than just new construction, Finance Minister Liao Min said at the same press conference, according to CNBC's Chinese translation.

He added that authorities are considering plans to reduce real estate-related taxes. He did not name specific figures and noted that multiple policies are needed to support real estate.

A meeting in late September led by Chinese President Xi Jinping called for authorities to strengthen fiscal and monetary policy support. But they did not give details.

Analysts' estimates of how much fiscal stimulus is needed range from about 2 trillion yuan ($283.1 billion) to more than 10 trillion yuan.

Nomura's chief China economist Ting Lu warned in a note on Thursday that any such stimulus would normally require approval by China's parliament, a meeting expected to be held later this month. He added that how any funds are used is as important as the amount disbursed – whether they are focused solely on struggling local government money or increasing spending.

China's retail sales have grown only modestly in the past few months, and the country's real estate slump has shown few signs of turning around.

GDP rose 5% in the first half of the year, sparking concerns that China could miss its full-year target by about 5%. All eyes are now on October 18, when the National Bureau of Statistics will release third-quarter GDP.

Bruce Pang, chief economist and head of greater China research at JLL, said he was looking for more details to be announced at a parliamentary meeting later this month. He added it would be “rational and practical” to keep some dry powder in case of unexpected shocks.

After markets reopened on Tuesday after a week-long holiday, mainland Chinese stocks were volatile throughout the week, as a stimulus-fueled rally lost steam. The decline took major indices to levels seen in late September.

Stocks then climbed — the CSI 300 saw its best week since 2008 — as major policy announcements signaled the Chinese government was finally taking steps to stimulate sluggish growth.

Just days after the Federal Reserve began its easing cycle, the People's Bank of China cut some of its interest rates and extended existing real estate support measures for two years. The PBOC also launched a roughly $71 billion program that allows institutional investors to borrow funds to invest in stocks.

The National Development and Reform Commission, the top economic planning body, pledged at a rare news conference on Tuesday that 200 billion yuan had been earmarked for next year, mostly for investment projects. NDRC has not announced additional stimulus.

Saturday is a working day in China, but the markets are closed.