(Bloomberg) -- China’s finance ministry reaffirmed it will increase public spending with a greater focus on boosting consumption to support the economy next year, ahead of growth headwinds from looming US tariffs.
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China will “expand the magnitude of fiscal spending and accelerate the spending pace,” according to a statement published Tuesday following a two-day national conference held by the Ministry of Finance on fiscal work in 2025.
The meeting repeated calls made by top leaders at an annual agenda-setting economic conference earlier this month, including to lift the headline budget deficit ratio and to issue more government bonds. In addition, the finance ministry vowed to step up support for a consumer product trade-in program and to expand government investment.
China’s top policymakers adopted a more pro-growth policy stance for next year, including pledges to use “more proactive” fiscal tools. Some economists forecast an overall increase in fiscal stimulus equivalent to about 2% of gross domestic product, which is still modest globally speaking. It will likely fall short of the kind of radical action analysts believe is required to stem a deflationary spiral and rescue the property market.
Chinese leaders plan to set an annual growth goal of about 5% for next year, and raise the budget deficit to 4% of GDP from 3% this year, Reuters reported. The new growth goal would match this year’s target, which officials are on track to hit after unleashing a slew of stimulus since September including rate cuts and more cash for banks.
On government spending, the finance ministry vowed to optimize its structure to better benefit people’s livelihoods and consumption. It also pledged to prevent unreasonable fines and fees for companies.
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