China's Fiscal Policy: Balancing Stability and Expansion
China's fiscal performance in 2024 has been stable, with the country expected to achieve a balanced budget, according to Vice-Minister of Finance Liao Min. This marks a steady fiscal approach following global economic uncertainties. The government has managed expenditure and revenue prudently, ensuring fiscal equilibrium while addressing key development needs.
In contrast, 2025 will see a significant increase in China's fiscal deficit, reflecting an expanded fiscal policy to support economic recovery. Liao Min highlighted plans to raise the fiscal deficit ratio, aligning with the country's growing GDP and enhancing countercyclical adjustments. This proactive stance includes higher government spending to sustain recovery efforts while maintaining medium- to long-term fiscal sustainability.
Policy measures for 2025 will undergo strict statutory procedures to ensure alignment with broader economic goals. Businesses and investors may find opportunities in sectors benefiting from increased government expenditure, such as infrastructure and green industries. However, they must remain vigilant about potential fiscal risks, including debt sustainability and inflation.
For global stakeholders, understanding these fiscal shifts will be key to navigating opportunities and challenges in China’s evolving economic landscape.
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