China’s Finance Minister Lan Fo’an announced that a more proactive fiscal policy will be implemented in 2025, with “sustainable strength and efficiency.” The main goal is to significantly increase consumption and investment to expand domestic demand.
As China is the world’s “most promising super-sized market,” Lan conveyed that new measures have been taken to stimulate consumption on both the supply and demand sides.
At the China Development Forum held on March 23-24, Lan emphasized that despite economic difficulties, the country’s experience in macroeconomic and fiscal management has grown. China’s ultra long-term growth potential is supported by its strong foundation, resilience, and vast consumer market. Lan also noted that proactive steps have been taken to address risks and that fiscal maneuverability remains high.
This comes as the gold price remains above $3,000 per ounce, indicating strong demand for a safe-haven asset. China is one of the top six largest holders of gold, with 2,280 tonnes as of December 2024. Still, it trails far from the U.S., which holds 8,133 tonnes.
In this context, 1.3 trillion yuan (about $181 billion) of ultra-long-term special bonds will be issued in 2025. This figure, increased by 300 billion yuan compared to last year, is aimed at supporting consumption and investment. In contrast, U.S. Treasury bonds (e.g., 10 year Treasury Yield) generally fund major government expenditures, including finance deficit, social programs, and defence.
Lan stated that financial resources have been allocated to education, science, technology, and talent development, with the aim of accelerating the growth of new-generation productive forces.
Additionally, the central government’s budget share has been increased to support the integration of technological and industrial innovations.
These steps aim to strengthen China’s global competitive advantage and improve the coordination of funding channels to expand effective investments.
Speaking to international business leaders, Lan pointed out that China’s high-standard opening-up policy will be supported by fiscal mechanisms. He emphasized that reforms that guarantee equal treatment for all types of businesses and improve the business environment will continue, while reiterating China’s commitment to contributing to global economic stability.
Within the forum’s theme, “Unleashing Development Dynamics for Global Economic Stability,” analysts are closely monitoring the impact of China’s fiscal policies on regional and global markets.
However, we should keep a close eye on the U.S. tariffs, which could disrupt global supply chains and trade flows and affect market confidence. China’s measures could play a critical role in boosting investor confidence and ensuring the sustainability of economic growth.
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