China to strengthen proactive fiscal policy for high-quality development over next 5 years, finance minister says

BEIJING, Nov. 15 -- China will implement a proactive fiscal policy in an effective manner to support the country's high-quality development during the 15th Five-Year Plan period (2026-2030), according to Finance Minister Lan Fo'an.

Over the next five years, China's development environment will undergo profound and complex changes, the minister said in an interview with Xinhua.

Internationally, the external environment is volatile and unstable, major-country rivalry is becoming more intricate and intense, unilateralism and protectionism are on the rise, and the world economy lacks growth momentum.

Domestically, China's economy exhibits solid fundamentals, strong resilience, and great potential. The conditions and underlying trends supporting long-term growth remain unchanged. At the same time, there are notable changes in industrial structure, business models, population demographics, and wealth distribution; however, risks in some areas have yet to be fully resolved.

These shifts will have profound implications for fiscal operations, macro regulation and fiscal and tax reform, Lan said, adding that it is therefore essential to respond effectively to the evolving situation, seize and create opportunities amid crises and challenges, and enhance the effectiveness of fiscal policy to better promote the country's high-quality development.

The minister said the finance authorities will strengthen counter-cyclical and cross-cyclical regulation, set the deficit-to-GDP ratio and the scale of government borrowing in line with evolving conditions, make combined use of tools such as the budget, taxation, government bonds and transfer payments, and provide sustained support for economic and social development.

Support will be increased for areas including the modern industrial system, science and technology, education and social security, while coordination between fiscal policy and monetary, industrial and regional policies will be strengthened to improve coherence across the whole process of policy formulation and implementation, said the minister.

On building a strong domestic market, Lan said China will make coordinated use of policy tools such as fiscal subsidies to expand consumption of goods and services, foster new consumption growth drivers, and create new consumption scenarios.

China will also make coordinated use of local government special-purpose bonds and ultra-long special treasury bonds while optimizing the direction of government investment.

Meanwhile, the country will expand effective investment, encourage private capital to participate in major projects, and move faster to build a unified national market and foster a fair and just market environment, said the minister.

The minister said China will advance fiscal reform and management over the next five years, with a stronger focus on optimizing resource allocation, improving the structure of fiscal expenditure and raising the efficiency of fund use.

Greater emphasis will be placed on balancing efficiency and equity, giving full play to the role of taxation in promoting high-quality development, social fairness and a unified market, he said.

The country will refine the fiscal relationship between the central and local governments, and ramp up the establishment of long-term mechanisms for government debt management that meet the needs of high-quality development, said the minister.