China pledges timely fiscal support to bolster growth

Vice Finance Minister Liao Min announced that China will introduce additional fiscal measures to support economic growth as the country's economy slows. Speaking at a press conference, Liao emphasized the importance of maintaining continuity and stability in macroeconomic policies and allocating fiscal resources over the longer term.

He indicated that a larger portion of fiscal spending would be allocated to households and consumption to bolster weak domestic demand. Liao also highlighted the need for greater coordination between fiscal, monetary, and industrial policies, as well as the refinement of the policy toolkit in response to changing economic conditions.

The authorities are currently preparing new fiscal-financial support measures for the second half of the year, working closely with the central bank and regulators to enhance policy coordination. However, specific details were not disclosed.

China has already implemented loan interest subsidies for small private firms and consumers as part of its efforts to stimulate domestic demand. The scheme will subsidize one percentage point of interest on eligible small-business loans for up to two years and extend the subsidy to credit-card installment products, with increased subsidy caps, according to the finance ministry.

In July, Chinese leaders pledged to support the slowing economy by accelerating fiscal spending on budgeted infrastructure projects for the remainder of the year, instead of planning major new stimulus measures. Beijing aims to achieve a budget deficit of around 4% of GDP for 2026 and has pledged to accelerate bond issuance to bolster growth.

The People's Bank of China stated this month that it would maintain an appropriately loose monetary stance and deploy practical, effective measures as required, but did not explicitly signal rate cuts or adjustments to the reserve-requirement ratio.

Liao outlined China's commitment to deepen fiscal and tax reforms, improve budget management, and establish a clearer framework for central-local fiscal relations, with defined responsibilities and balanced regional development. He emphasized that preventing local governments from accumulating new hidden debt remains a strict discipline, and stressed the need to steadily reduce fiscal risks in key areas, particularly local government debt.