China to Ramp Up Bond Issuance, Widen Budget Deficit to Boost Growth

The Ministry of Finance stated on Tuesday that China will raise its budget deficit ratio in 2025, intensify fiscal spending, and accelerate expenditures. Following the Chinese Financial Work Conference, the Ministry announced that the government will issue larger-scale state bonds to provide greater support for stabilizing growth.

During the conference, leaders reiterated calls made at an annual economic conference held earlier this month, such as raising the budget deficit ratio and issuing more state bonds. Additionally, the Ministry promised to increase support for the consumer products exchange program and expand state investments.

China's top policymakers have also adopted a more growth-friendly policy stance, including a commitment to use "more proactive" fiscal tools for the coming year. Some economists predict a general increase in fiscal stimulus equivalent to about 2% of gross domestic product, which is still considered modest on a global scale. Analysts believe that the type of radical actions necessary to halt a deflationary spiral and rescue the real estate market will likely fall short.

The Ministry of Finance pledged to optimize its structure in government spending to better benefit people's livelihoods and consumption. It also promised to prevent unreasonable fines and fees for companies.