In a strategic response to global economic uncertainties, inflation pressures, and rising geopolitical risks, China is ramping up its fiscal policies to bolster both domestic and international stability. 🇨🇳💹
During the recent government work report presented to the national legislature, Chinese Premier Li Qiang announced a shift towards a more proactive fiscal policy. By 2025, the government's debt is projected to reach 11.86 trillion yuan (approximately $1.66 trillion), marking an increase of 2.9 trillion yuan from the previous year. This significant rise, with the deficit-to-GDP target moving up to 4% from 3% in 2024, showcases China's commitment to leveraging fiscal strength to maintain economic momentum.
As part of this expansive fiscal strategy, China will issue a record 1.3 trillion yuan in ultra-long-term special treasury bonds, a 300 billion yuan increase from last year. Additionally, 4.4 trillion yuan in local government special bonds will be released, setting a new high. 💰📈
These measures are designed to inject liquidity into the economy, reduce financing costs, and accelerate economic activities to navigate through global and domestic uncertainties. The increased spending reflects a dedication to boosting investment, enhancing industrial capacity, and stimulating domestic consumption. 🔧🏭🛍️
One of the standout elements of this fiscal plan is the issuance of ultra-long-term special treasury bonds. These bonds, with maturities ranging from 20 to 50 years, are crucial for funding transformative national projects aimed at modernization. Unlike previous bond issuances used during crises, this round is forward-looking, targeting long-term initiatives in technological innovation, green energy transition, infrastructure resilience, and food and energy security. 🌱⚡🏗️
China's proactive fiscal stance underscores its strategy to drive technological self-sufficiency, support integrated urban-rural development, and ensure high-quality population growth. By doing so, China aims to maintain its competitiveness and secure a strong position in the global economy for decades to come.
Reference(s):
China's proactive fiscal policy driving growth, investment & stability
cgtn.com
