The direction of fiscal policy in 2025 is clear and definitive: it will be very proactive.
The Ministry of Finance’s Deputy Minister Liao Dan introduced the achievements of high-quality financial development at a series of press conferences on the “China’s High-Quality Economic Development Achievements” held by the State Council Information Office at 3pm on January 10th.
Liao Dan stated that in 2025, the financial sector will implement a more proactive fiscal policy in accordance with the deployment of the Central Economic Work Conference. This policy will continue to be applied with greater force, aiming to play a combined punch in policies effectively. The more proactive fiscal policy in the future is expected to be mainly reflected in three aspects: intensity, efficiency, and timing.
In terms of intensity, the policy space will be fully utilized to strengthen counter-cyclical adjustment, increase the fiscal deficit rate, and enhance expenditure intensity. This will further increase transfer payments to local governments, strengthen local financial resources, ensure the bottom line of “three guarantees” (i.e., guaranteeing employment, food security, and basic living standards), and arrange larger-scale government bonds, including ultra-long-term special national bonds and local government special bonds. Overall, fiscal policies will increase their efforts to safeguard economic stability.
In terms of efficiency, the expenditure structure will be optimized to focus more on benefiting the people’s livelihood, promoting consumption, and increasing potential energy. Support for stable employment will be increased by promoting income increases for residents, improving social security systems, cultivating new consumer industries, and improving consumption conditions. Focus will also be on supporting areas such as education and talent development, technological breakthroughs, rural revitalization, green and low-carbon development, while steadily promoting scientific management of finances to ensure that every cent is spent on essential areas.
In terms of timing, proactive efforts will be made to enhance the forward-looking and targeted nature of policies, accelerate expenditure progress, and form actual expenditure as soon as possible to drive more social investment and maximize policy effectiveness.
The direction of fiscal policies in 2025 is clear and well-defined, fully considering the need to strengthen counter-cyclical adjustments and demonstrating a very proactive approach.
