China Maps 2026 Fiscal Push to Boost Demand, Curb Local Debt
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According to the report, the ministry will continue issuing ultra-long-term special government bonds for major national projects. Photo: IC
China’s Ministry of Finance has outlined its fiscal policy blueprint for 2026, prioritizing an expansion of domestic demand while advancing reforms to the budget system and the management of local government debt.
The plan was detailed in the 2025 China Fiscal Policy Execution Report released Tuesday. Key initiatives for 2026 include accelerating the rollout of guidelines to improve the budget system, a new policy goal also cited in the national budget report approved by the national legislature this month.
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- China’s 2026 fiscal policy prioritizes expanding domestic demand, targeted spending, and reforming the budget and local government debt systems.
- Measures include ultra-long-term bonds, boosting consumption with lotteries and campaigns, expanding special-purpose bond pilot programs, and increasing oversight of local debt.
- Public welfare funding rises, with education spending at 4.34 trillion yuan (up 3.2%) and higher subsidies for medical insurance and pensions in 2025.
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What Happened When
- Late 2024：
- Pilot program allowing some local governments to self-review and self-issue special-purpose bonds began.
- 2025：
- National public budget expenditure on education reached 4.34 trillion yuan, up 3.2% from 2024.
- 2025：
- Central government raised per capita subsidy for basic medical insurance for urban and rural residents by 30 yuan to 700 yuan annually.
- 2025：
- National minimum monthly basic pension for urban and rural residents increased by 20 yuan.
- March 2026：
- National budget report for 2026 cited the rollout of guidelines to improve the budget system as a new policy goal.
- March 17, 2026：
- The 2025 China Fiscal Policy Execution Report was released, outlining the fiscal policy blueprint for 2026.
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