China has more room to act on fiscal policy amid domestic and external uncertainties, Finance Minister Lan Fo’an said during China’s annual parliamentary meeting. The country raised its on-budget deficit to 4% of gross domestic product, the highest since at least 2010.
The government plans to issue $178.9 billion in ultra-long-term special treasury bonds and 1.3 trillion yuan ($178.9 billion) in local government special-purpose bonds to support consumption and ease financial strains on local authorities. China aims to boost GDP by around 5% this year, with a lower inflation target of 2%.
Officials emphasized that it will take hard work for China to reach its targets, amid rising trade tensions with the US. The country’s economy grew by 5% last year, but benefitted from strong exports that offset lackluster consumption.
China is prioritizing spurring consumption and has announced plans to issue special bonds to support local authorities. Finance Minister Lan Fo’an noted that China has delivered a pro-growth message, despite facing challenges, including low business and consumer sentiment.
Source: https://www.cnbc.com/2025/03/06/china-has-room-to-act-on-fiscal-policy-amid-uncertainties-finance-minister-says.html