China to raise deficit-to-GDP ratio, expand government bond issuance in 2025: national financial work conference

China's Ministry of Finance (MOF) held a two-day national financial work conference from Monday to Tuesday, unveiling plans to implement a more proactive fiscal policy in 2025. These plans include increasing the fiscal deficit-to-GDP ratio and issuing larger-scale government bonds, as outlined in an official MOF statement.

According to the statement issued on the ministry's official website, the conference also highlighted boosting domestic demand as a key focus for 2025, aligned with the strategic objectives outlined at the Central Economic Work Conference.

As 2024 is a crucial year for achieving the goals of the 14th Five-Year Plan (2021-25), the fiscal conference urged strengthened budget management to meet the economic and social development targets for the year.

The statement also stressed the need for comprehensive fiscal policy measures, with increased fiscal deficit ratio, increased government spending, and faster deployment of funds linked to fiscal policy tasks for 2025.

This meeting called for the effective implementation of existing and new fiscal policies, promoting the development of science and technology leadership, and taking proactive measures to mitigate major risks in critical areas to achieve new progress and effectiveness in fiscal work.

Key fiscal priorities for next year also include issuing larger-scale government bonds, optimizing expenditure structures, prioritizing people-centered policies, encouraging consumption and driving economic growth, as well as increasing transfers to local governments.

Supporting the expansion of domestic demand was identified as a top priority among six major tasks for 2025. Measures include raising basic pensions for retirees, increasing the basic pension for urban and rural residents, and strengthening support for consumer goods trade-ins to stimulate consumption.

The MOF called on all levels of finance departments to consistently execute key measures, foster a stable and sustained economic recovery, ensure the successful completion of the 14th Five-Year Plan, and lay a solid foundation for the next Five-Year Plan.