China to pursue more proactive fiscal policy, finance minister says

China will continue to pursue a more proactive fiscal policy next year with enhanced precision and effectiveness, to promote an effective improvement in the quality of the economy and a reasonable expansion in its scale while maintaining social harmony and stability, Finance Minister Lan Fo'an said on Saturday.

He said the goal is to lay a strong foundation for a successful start to the 15th Five-Year Plan (2026-30) period, calling on fiscal authorities at all levels to focus on expanding domestic demand, upgrading the economic structure, strengthening growth drivers, and improving people's livelihoods — while prioritizing the stabilization of employment, businesses, markets, and expectations, and simultaneously advancing reforms, enhancing management, mitigating risks, and boosting efficiency.

He made the remarks at the national work conference for the fiscal system held in Beijing from Saturday to Sunday, during which he summarized the achievements of the fiscal system in 2025 and outlined its key tasks for 2026.

"We will expand the scale of fiscal expenditure to ensure adequate funding for necessary spending, and optimize the mix of government bond instruments to enhance their effectiveness," Lan said.

"We will also improve the efficiency of transfer payments to strengthen local governments' available and flexible fiscal resources," he said.

The authorities will also refine the expenditure structure to better support key priority areas, while strengthening coordination between fiscal and financial policies to amplify policy effectiveness, he added.

Key tasks in the fiscal area for the next year include making domestic demand the main engine of growth and building a robust domestic market, while accelerating the integration of technological and industrial innovation to foster new growth drivers, and advancing urban-rural integration and regional coordination to create more room for development.

They also include better safeguarding people's livelihoods, promoting a comprehensive green transition in economic and social development, and strengthening international financial and economic cooperation to further advance high-standard opening-up, Lan said.

Highlighting efforts to boost consumption, Lan said, "We will press ahead with the targeted initiative to spur consumption, actively expand effective investment, step up input in key areas such as new quality productive forces and people-centered development."

"To accelerate the building of a unified national market, we will also standardize tax incentives and fiscal subsidy policies," he added.

The ministry will also ramp up fiscal support for science and technology, improve fund oversight, strengthen enterprises' key role in innovation, while pushing ahead with high-quality development of key industrial chains, launching a fresh round of pilot programs in selected cities for technology upgrades in the manufacturing sector, and accelerating the building of a modern industrial system.

Moreover, the ministry will continue efforts to advance rural revitalization, support people-centered urbanization, and promote more coordinated regional development.

According to Lan, the ministry will further boost employment and incomes, improve people-centered education, enhance access to healthcare, and strengthen the social safety net, while unlocking new room for development by better meeting people's livelihood needs.

The senior official also highlighted advancing pollution control and ecosystem restoration, strengthening support for green and low-carbon development, and taking a coordinated approach to decarbonization, pollution reduction, ecological restoration and growth to energize green development.

Additionally, sustained efforts will focus on advancing reforms in global economic and financial governance, strengthening international trade and economic cooperation, and ensuring the effective implementation of goods-related tax policies for the island-wide independent customs operation of the Hainan Free Trade Port, Lan added.

He also emphasized the importance of comprehensively strengthening fiscal scientific management, deepening pilot programs in scientific fiscal management and firmly securing "three guarantees" — safeguarding basic living needs, ensuring salary payments, and maintaining grassroots operations.

Risk resolution must go hand-in-hand with building long-term mechanisms, maintaining rigorous oversight of government debt, he said, adding the fiscal and tax system reforms should be deepened with a balance between steady implementation with bold innovation.

He also said asset management must combine safeguarding and efficient utilization to improve the State-owned asset management system, and precise problem identification with effective solutions is needed to strengthen financial and accounting supervision.

The minister also noted the year of 2025 saw China's fiscal system making new achievements, with substantial contributions for the country to advancing towards socioeconomic development goals and targets.

For instance, the fiscal authorities, Lan said, have kept fiscal spending robust, increased support for key national priorities, broadened and intensified trade-in programs for equipment and consumer goods, and unlocked consumption potential on both the supply and demand sides.

"Focusing on high-quality development, we have substantially stepped up investment in basic research and launched city-level pilots for next-generation technology upgrades, alongside digital transformation pilots for small and medium-sized enterprises," Lan said.

As for people's well-being, he said fiscal authorities have strengthened policy tools to support stable employment, made steady progress toward free preschool education, raised national scholarship and student grant levels, and put in place a childcare subsidy program.

"We have moved to contain risks in key areas, strengthened end-to-end oversight of the swap of local government hidden debt, and advanced the orderly wind-down and real transformation of local government financing platforms through a differentiated approach," Lan said.

Moreover, fiscal authorities have pushed zero-based budgeting reforms in local governments, fine-tuned policies such as value-added tax credit refunds, and upgraded the government procurement framework, he added.

An official from Sichuan province's fiscal delegation at the work conference told China Daily at a sideline interview that a package of measures combining lighter burdens, broader support and stronger incentives has fueled a sustained rebound in the province's consumption market this year.

He noted that from January to November, Sichuan's total retail sales of consumer goods reached 2.64 trillion yuan, growing 5.5 percent year-on-year — 1.5 percentage points faster than the national average.

"Looking ahead, we will keep expanding domestic demand as a key strategic focus, advance targeted measures to boost consumption, fine-tune the trade-in programs, encourage a stronger supply of quality goods and services, and further unleash consumption potential," he added.