Cover Story: Six Things to Know About China’s Fiscal Plan to Reignite the Economy

In a more forceful push to boost China’s sluggish domestic demand, policymakers are trying to make fiscal policy do more of the heavy lifting.

At the center of the effort is a 100 billion yuan ($14 billion) policy package that combines fiscal incentives with bank lending tools to steer more credit toward consumption and private investment.

The measure was first mentioned in a State Council meeting on Jan. 9, calling for the implementation of “a package of fiscal-financial coordinated policies to boost domestic demand.” It was then formalized in Premier Li Qiang’s government work report in March, saying that the government would set up a 100 billion yuan special fund this year to support domestic demand through a mix of interest subsidies, financing guarantees and risk-compensation tools.