Amidst both internal and external uncertainties, China has unveiled significant adjustments to its fiscal policy. The nation’s Finance Minister Lan Fo’an highlighted the country's readiness to adopt more flexible financial measures during a recent press conference. These changes come as part of China’s annual parliamentary meeting, where policymakers are addressing economic challenges posed by global trade tensions. In response to questions about proactive fiscal strategies, Lan emphasized that the government is prepared to take decisive actions to bolster economic growth. This includes increasing the on-budget deficit to 4% of GDP, marking the highest level since at least 2010. Such moves aim to inject momentum into various sectors of the economy, particularly in light of recent geopolitical developments.
The government plans to issue a substantial amount of ultra-long-term special treasury bonds, totaling 1.3 trillion yuan in 2025, which represents a significant increase from the previous year. Additionally, local governments are set to issue 4.4 trillion yuan in special-purpose bonds this year, aiming to alleviate financial pressures and support key initiatives. These measures reflect a comprehensive approach to stimulate domestic demand and stabilize the economy. Furthermore, China has set its sights on achieving a GDP growth target of around 5% for the year, while also lowering the inflation target to 2%. Officials have acknowledged that reaching these targets will require concerted efforts, especially considering last year’s reliance on robust exports to offset weaker consumption and real estate downturns.
Industry experts view these policy shifts as positive signals toward promoting economic vitality. Analysts note that beyond specific stimulus programs, fostering business and consumer confidence remains crucial. Recent interactions between President Xi Jinping and tech entrepreneurs underscore the government’s commitment to encouraging private sector growth. These steps demonstrate China’s dedication to overcoming current economic hurdles and maintaining a steady path towards sustainable development. The nation's proactive stance not only addresses immediate challenges but also sets the stage for long-term prosperity and stability.