The Ministry of Finance releases a 20,000-word report—what are the key points?

China’s first official report on implementing a more proactive fiscal policy has been released.

On March 17, the Ministry of Finance published the “2025 China Fiscal Policy Implementation Report” (hereinafter referred to as the “Report”). The 20,000-word report mainly summarizes the content and effectiveness of fiscal policies in 2025 and looks ahead to 2026.

2025 marks China’s first implementation of a more proactive fiscal policy. So, what are the results?

The “Report” states that fiscal departments at all levels effectively carried out a more proactive fiscal policy last year, continuously increasing efforts, strengthening coordination with other policies, and providing solid support for achieving annual economic and social development goals. The implementation of a more proactive fiscal policy was also listed as the top of the five key work points summarized in the “Report.”

Last year, the national fiscal operation remained generally stable. However, due to multiple factors, the national general public budget revenue and government fund revenue fell short of expectations. To effectively implement a more proactive fiscal policy, maintaining a certain level of expenditure is crucial, which requires the government to increase borrowing.

In listing the measures taken last year to implement a more proactive fiscal policy, the “Report” mentions the smooth issuance of 1.3 trillion yuan of ultra-long special national bonds to support “dual” construction and “two new” initiatives; an additional 4.4 trillion yuan of local government special bonds to support over 48,000 projects; the issuance of 500 billion yuan of special national bonds to support large state-owned commercial banks in replenishing core Tier 1 capital; and policies such as subsidizing personal consumer loans and loans for service industry operators.

The effects of these major measures are already evident.

For example, the “Report” notes that last year, efforts to expand and promote consumption through measures like old-for-new product exchanges and innovative consumer loan interest subsidies boosted consumption.

Last year, China provided a 1 percentage point interest subsidy support for qualifying personal consumer loans. The supported consumption included small daily expenses, car purchases, home renovations, furniture and appliance purchases, mobile phones and computers, as well as services like travel, elderly care, and education training. Data from the “Report” shows that by the end of 2025, the personal consumer loan balance managed by 23 institutions reached nearly 6 trillion yuan, an increase of over 500 billion yuan from 2024, a growth of 10.2%.

Additionally, the “Report” states that last year, 500 billion yuan of special national bonds were issued to support Chinese banks such as Bank of China, China Construction Bank, Bank of Communications, and Postal Savings Bank of China in replenishing their core Tier 1 capital. The core Tier 1 capital adequacy ratios of these four banks increased by approximately 0.5 to 1.4 percentage points, significantly enhancing their soundness, lending capacity, and risk resistance.

Last year’s trade tensions, which temporarily escalated, also drew attention, with external concerns about how fiscal measures would support stabilizing foreign trade and attracting foreign investment.

The “Report” summarizes five aspects of this: better utilization of tariff regulation, timely and effective responses to external shocks, accelerating the construction of Hainan Free Trade Port, expanding the network of high-standard free trade zones, and stabilizing the foreign investment base.

For example, in responding promptly and effectively to external shocks, China resolutely countered U.S. tariffs through retaliatory measures, safeguarding legitimate rights and interests. It actively participated in and served China-U.S. trade negotiations, diligently implemented and protected the outcomes, and promoted significant tariff reductions and tariff suspension extensions, which boosted confidence in both countries and global markets, injecting more stability and certainty into world economic development.

Another focus of external attention is how to further mitigate local government debt risks.

The “Report” believes that in 2025, risk prevention and resolution of local government debt was effective. For instance, last year, detailed implementation of debt replacement policies was carried out, with all 2 trillion yuan of replacement bonds issued, and efforts to accelerate reform and transformation of financing platforms. The debt resolution policies significantly reduced local governments’ interest expenses, greatly alleviating their debt repayment pressures; effectively drove local fiscal stability; released more policy space; enhanced local development momentum; and accelerated the exit and orderly reform of financing platforms.

The “Report” clearly states that in 2026, a more proactive fiscal policy will be implemented, focusing on seven key areas: supporting the development of a strong domestic market; fostering new growth drivers; accelerating high-level technological independence and self-reliance; increasing efforts to ensure and improve people’s livelihoods; promoting new urbanization and regional coordinated development; speeding up green transformation; and strengthening fiscal management.

For example, in terms of people’s livelihoods, which is of greatest concern to the public, the “Report” states that this year, the per capita financial subsidy standard for urban and rural residents’ basic medical insurance will be increased. The basic pension for urban and rural residents will be raised. Efforts will be made to implement subsidies for elderly care services for moderately and severely disabled seniors. The childcare subsidy system will also be implemented.