BEIJING, Dec. 28, 2025 — China’s Ministry of Finance has announced that the country will adopt a more proactive fiscal policy stance in 2026, aimed at strengthening domestic demand, accelerating innovation, and expanding social support networks as it strives to sustain robust economic growth of around 5 % next year.

At the national fiscal work conference held in Beijing, Finance Minister Lan Fo’an stressed that fiscal policy will play a key role in laying a solid foundation for China’s 15th Five-Year Plan (2026–2030) and ensuring economic stability amid persistent headwinds such as a sluggish property market and weaker external demand.

Key Focus Areas of the 2026 Fiscal Strategy

1. Expanding and Refining Fiscal Expenditure

Beijing plans to increase the scale of government spending next year to maintain the necessary fiscal impetus. This includes optimizing the structure of expenditure to ensure funds are channeled to priority areas such as technology, human capital, and consumption-boosting initiatives.

2. Strengthening Domestic Demand

A central theme of the fiscal strategy is bolstering domestic consumption and investment. Policymakers are expected to roll out measures like trade-in incentive programs for consumer goods, and targeted subsidies to encourage household spending. Expanding effective investment in infrastructure and emerging industries—such as advanced manufacturing and green technologies—is also a priority.

3. Boosting Innovation and Human Development

China’s fiscal blueprint places emphasis on innovation-driven growth and comprehensive human development. This includes increasing investment in scientific research, talent cultivation, and education and training programs to support a new generation of high-tech industries.

4. Enhancing Social Safety Nets

Fiscal measures will also aim to strengthen social welfare systems by improving healthcare services, expanding education access, and enhancing social security provisions. Officials have underlined the importance of creating a more robust safety net to support jobs, income growth, and quality of life.

Fiscal Discipline and Local Government Support

While expanding spending, Beijing is also working to improve the efficiency of government bond usage and transfer payments to local governments, ensuring that funds are spent effectively where needed most. Efforts to manage and reduce hidden local government debt risks will be intensified to preserve long-term fiscal sustainability.

Economists note that this fiscal stance reflects a strategic balance between supporting short-term growth and reinforcing long-term economic resilience, especially in the context of weak global demand and structural challenges at home.

Looking Ahead: A Foundation for the 15th Five-Year Plan

China’s shift toward a more proactive fiscal policy in 2026 is widely viewed as foundational to the broader economic agenda of the 15th Five-Year Plan. Over this next five-year period, authorities are expected to use fiscal tools more strategically to support sustainable development, structural transformation, and high-quality growth — moving beyond cyclical stimulus to deeper structural support.

In summary, China’s 2026 fiscal blueprint reflects a renewed emphasis on domestic demand, innovation, and social support — designed to underpin a steady growth trajectory in a challenging global environment while laying the groundwork for long-term economic transformation.