Today (January 20), the State Council Information Office held a press conference where relevant officials from the Ministry of Finance introduced the role of proactive fiscal policies in promoting high-quality economic and social development.
It was introduced at the press conference that efforts will be made to boost consumption in 2025.
An ultra-long-term special government bond worth 1.3 trillion yuan has been issued to continuously support key areas and new initiatives, of which 300 billion yuan is allocated for consumer goods trade-in programs, providing direct subsidies to consumers. This measure has driven related product sales exceeding approximately 2.6 trillion yuan. A large number of green, low-carbon, and smart products have accelerated their entry into households, improving people's quality of life while also promoting economic transformation and development.
To stimulate consumption potential from both supply and demand sides, policies have been introduced and implemented to subsidize personal consumer loans and service sector business entity loans. Support will be provided for piloting new forms, models, and scenarios of consumption, as well as the construction of an internationalized consumer environment.
The duty-free shop and tourist departure tax rebate policies have been adjusted and optimized, with an increase in the number of duty-free shops to encourage and expand relevant consumption.
The government debt ratio of China remains relatively low, far below the average level of G20 countries.
On January 20, Liao Min, Vice Minister of Finance, stated at a press conference held by the State Council Information Office that China plans to set the fiscal deficit ratio at around 4% for 2025, an increase of one percentage point from the previous year. The scale of new government debt will reach 11.86 trillion yuan, an increase of 2.9 trillion yuan compared to last year. These figures are much higher than the average levels of recent years. Despite the increase in fiscal deficits and government bond issuance in 2025, China’s government debt ratio remains relatively low when compared internationally, far below the average government debt ratio of G20 countries.
In 2026, ultra-long-term special government bonds will continue to be issued for key projects and new initiatives.
Liao Min stated that in 2026, ultra-long-term special government bonds will continue to be arranged for key projects and new initiatives. Policies will be optimized, including the implementation of improved negative list management for special bond projects, deepening self-examination and self-issuance pilots, to better enhance the efficiency of bond funding.
The Ministry of Finance will continue to implement a more proactive fiscal policy.
Liao Min stated that the Ministry of Finance will continue to implement a more proactive fiscal policy. In summary, it can be described as 'increased total volume, optimized structure, enhanced effectiveness, and stronger momentum.' The fiscal deficit, total debt scale, and expenditure volume for 2026 will maintain necessary levels to ensure that overall spending increases rather than decreases.
Local government debt risks are gradually converging.
Liao Min stated that the risks associated with local government debt in China are gradually converging. In 2025, the Ministry of Finance will strengthen the full-process management of the replacement of existing hidden debts, guiding local governments to scientifically classify and precisely replace them. After the replacement, the average interest cost of local government debt has been reduced by more than 2.5 percentage points, significantly alleviating the burden on local governments and enhancing their development momentum.
The abolition of export tax rebate policies for products such as photovoltaics contributes to the comprehensive management of 'internally competitive' disorderly competition.
Li Xianzhong, Director of the Comprehensive Department of the Ministry of Finance, stated at a press conference held by the State Council Information Office that recently, the Ministry of Finance and the State Administration of Taxation announced that starting from April 1, 2026, export tax rebates for products such as photovoltaics would be canceled, and export tax rebates for electronic products would be phased out over two years. This adjustment to the export tax rebate policy is conducive to promoting efficient resource utilization, guiding reasonable industrial restructuring, comprehensively managing 'internally competitive' disorderly competition, and driving high-quality economic development.
The central government has allocated special risk-sharing funds to provide credit support for bond issuance by private enterprises and private equity investment institutions.
Liao Min stated that supporting a risk-sharing mechanism for bonds issued by private enterprises is a new policy. The central government has allocated special risk-sharing funds, which work in synergy with existing policies of the central bank, to provide credit support for bond issuance by private enterprises and private equity investment institutions, compensating investors for partial losses.
It is expected that fiscal revenue and expenditure will be balanced throughout 2025.
Li Xianzhong, Director of the Comprehensive Department of the Ministry of Finance, stated at a press conference held by the State Council Information Office that the fiscal revenue and expenditure data for 2025 is still being compiled, with an official release expected by the end of January or early February. Based on the preliminary data available, it is expected that fiscal balance can be achieved for the entire year. National general public budget expenditures have been front-loaded and maintained at a strong level, providing necessary financial support for economic and social development.
China's fiscal subsidy scale is far lower than estimates by some international organizations.
Liao Min stated that China’s fiscal subsidy scale is far lower than estimates by some international organizations. The technological advancements and competitive advantages of Chinese enterprises do not rely on subsidies but are instead driven by continuous R&D investment by Chinese companies and the hard work of countless entrepreneurs.
After the optimization of the personal consumption loan interest subsidy policy, all consumer loans are eligible for interest subsidies.
Liao Min stated that the optimization and adjustment of the personal consumption loan interest subsidy policy this time has incorporated credit card bill installment services into the scope of interest subsidies and removed restrictions on certain consumption areas in the existing policy. The new policy means that as long as it is a consumer loan, it can enjoy interest subsidies.
The 'dual interest subsidy' policy will be continuously improved, with the ideal future scenario being that consumers benefit without even noticing.
Liao Min stated that the loan interest subsidy policy for service industry operators and the personal consumption loan interest subsidy policy will be continuously improved during implementation. The ideal future scenario is: once consumers take out a loan and begin repaying interest, the interest subsidy should automatically appear in their account, allowing consumers to truly receive policy support without any conscious effort.
Editor/Melody