Fiscal Priorities for a Stable Economic Start to the New Five-Year Plan

As China enters the initial phase of its 15th Five-Year Plan, ensuring the achievement of annual economic and social development targets has become a top priority for fiscal authorities. In a recent article, Finance Minister Lan Fo'an emphasized that the work in the coming months is critical, calling for more targeted incremental fiscal policies to enhance the effectiveness of proactive fiscal measures.

Central Objective: Boosting Effective Domestic Demand

A key focus of current economic policy is expanding effective domestic demand, essential for maintaining stable economic growth. Fiscal policy will advance on multiple fronts:

  • Accelerating Fiscal Expenditure: Regions with slower spending progress will receive intensified guidance and oversight to remove bottlenecks, ensuring fiscal funds are deployed swiftly and yield results sooner.
  • Coordinated Use of Various Funds: Resources including ultra-long-term special treasury bonds and local government special bonds will be channeled into major national strategic projects and infrastructure development (referenced as the "Six Networks" and "Dual Key" projects).
  • Enhancing Fiscal-Financial Coordination: Policies such as expanding interest subsidy coverage, increasing handling institutions, and appropriately raising quotas aim to more effectively unleash consumption potential and leverage private investment.

Incremental Policy Tools and Risk Management

Beyond these measures, a suite of incremental policy tools is under consideration or deployment:

To strengthen the financial system's capacity to serve the real economy, a plan is in place to issue 300 billion yuan in special treasury bonds. This will support relevant central financial enterprises in replenishing their core tier-one capital, thereby bolstering their stability and service capabilities.

Concurrently, authorities are studying incremental policies, such as utilizing remaining local government debt limits. This aims to enhance the financial保障 capacity of local general public budgets and provide more solid funding support for expanding effective investment.

This comprehensive policy approach seeks to balance growth support with risk prevention, aiming to provide precise support rather than broad stimulus, thereby building a robust fiscal foundation for achieving this year's economic objectives.