Ministry of Finance: Continue to Implement a More Proactive Fiscal Policy in 2026

By Reporter Han Yu

On March 17, the Ministry of Finance released the “2025 China Fiscal Policy Implementation Report” (hereinafter referred to as the “Report”). The Report shows that in 2025, China’s economy operated steadily with progress, and fiscal operations remained stable and orderly. Fiscal departments at all levels strengthened resource coordination, maintained necessary expenditure levels, and ensured good support for key areas.

The Report states that 2026 marks the beginning of the “14th Five-Year Plan.” The Ministry of Finance will continue to implement more proactive fiscal policies, improving precision and effectiveness, optimizing incremental growth, revitalizing stock, focusing on expanding domestic demand, improving structure, increasing momentum, and benefiting people’s livelihoods. It will also focus on stabilizing employment, enterprises, markets, and expectations; promoting reforms, strengthening management, preventing risks, and increasing efficiency. The goal is to achieve qualitative improvement and reasonable quantitative growth of the economy, maintain social harmony and stability, and provide strong support for a good start to the “14th Five-Year Plan.”

In 2026, more proactive fiscal policies will continue, mainly reflected in five aspects: First, expanding the fiscal expenditure scope to ensure necessary spending. Second, optimizing the government bond tool mix to better leverage bond benefits. Third, improving the efficiency of transfer payments to enhance local autonomous financial resources. Fourth, continuously optimizing the expenditure structure and strengthening support in key areas. Fifth, strengthening fiscal and financial coordination to amplify policy effects and better stimulate micro-entity vitality. Key tasks include supporting the development of a strong domestic market, accelerating the cultivation and expansion of new drivers of growth, speeding up high-level technological independence and self-reliance, increasing efforts to safeguard and improve people’s livelihoods, promoting new urbanization and regional coordinated development, accelerating comprehensive green transformation, and strengthening scientific fiscal management.

Regarding support for building a strong domestic market, the Report clarifies that continued issuance of ultra-long special national bonds will be used for “dual” construction and “two new” projects, with policy implementation optimized. Implementing a package of fiscal and financial coordinated policies to stimulate domestic demand, focusing on boosting private investment and promoting resident consumption, supporting reductions in corporate financing costs, enhancing residents’ consumption capacity, and expanding supply of quality services.

In supporting the cultivation and expansion of new growth drivers, the Report proposes rolling out high-quality development actions for key manufacturing industry chains. Using special funds, government investment funds, and financing guarantees to support high-tech enterprises and tech-based SMEs. Continuing to implement fiscal awards and subsidies for specialized, refined, distinctive, and innovative SMEs.

In accelerating high-level technological independence and self-reliance, the Report states that efforts will be increased, a diversified innovation investment mechanism will be improved, and more social and financial capital will be mobilized into technological innovation. Optimizing the structure of science and technology expenditure, focusing further on basic research, applied basic research, and national strategic technological tasks to stimulate innovation vitality. Promoting integrated development of education, science, technology, and talent. Supporting the construction of international science and technology innovation centers in Beijing (Jing-Jin-Ji), Shanghai (Yangtze River Delta), and the Guangdong-Hong Kong-Macau Greater Bay Area. Guiding localities to align with national strategic needs and local industrial development to create distinctive regional innovation hubs.

In increasing efforts to safeguard and improve people’s livelihoods, the Report emphasizes strengthening employment support, stabilizing and expanding employment for key groups. Further increasing fiscal investment in education, implementing policies for gradually providing free preschool education, and ensuring student financial aid. Raising per capita fiscal subsidies for urban and rural residents’ basic medical insurance, improving healthcare service capacity and security levels. Improving social security systems, increasing basic pensions for urban and rural residents. Implementing subsidies for elderly with moderate or higher disabilities receiving elderly care services. Implementing parental subsidies. Promoting a tiered and categorized social assistance system. Supporting disaster prevention and mitigation capacity building, strengthening emergency rescue guarantees. Supporting cultural and sports development.

(Edited by Wen Jing)

Keywords: Fiscal Policy