By Special Correspondent

China expanded fiscal support for innovation, public wellbeing, agriculture and employment in 2025, according to the report on the execution of the central and local budgets.

The report states that finance departments implemented macroeconomic policies aimed at sustaining growth and supporting major national strategies. Expenditure in the general public budget reached 28.7 trillion yuan during the year.

Ultra-long special treasury bonds worth 1.3 trillion yuan were issued in 2025. Of this amount, 800 billion yuan was allocated to support major national strategies and strengthen security capacity in key areas, facilitating progress in more than 1,400 major projects.

Another 500 billion yuan was used to expand large-scale equipment upgrades and consumer goods trade-in programs. These initiatives generated more than 2.6 trillion yuan in sales of automobiles, home appliances, mobile phones, home furnishings, electric bicycles and other products, while equipment investment increased by 11.8%.

Local governments were allowed to issue 4.4 trillion yuan in special-purpose bonds to support more than 48,000 projects. Over 300 billion yuan from these bonds was used as project capital.

Authorities also issued 500 billion yuan in special treasury bonds to support large state-owned commercial banks in replenishing their core tier-1 capital.

Fiscal policy measures were also introduced to stimulate consumption. Interest subsidy policies were implemented for personal consumer loans and loans extended to service-sector businesses. Authorities also promoted new consumption models and expanded duty-free stores to encourage inbound consumption.

In the area of technological development, central government spending on science and technology increased by 7.1% compared with 2024, while expenditure on basic research rose by 9.6%.

Government support was provided to more than 1,200 specialized and innovative small and medium-sized enterprises to encourage further investment in technological innovation. Pilot programs for manufacturing upgrades using new technologies were launched in 26 cities, while 35 additional cities initiated digital transformation programs for small and medium-sized enterprises.

The report also highlights measures aimed at strengthening agricultural production and rural development. Agricultural insurance programs expanded significantly, providing rural households with more than 5 trillion yuan worth of risk protection through 125 million insurance policies.

Financial support was also provided for the establishment of 50 modern agro-industrial parks, 40 leading agro-industrial clusters and 198 towns with distinctive agro-industrial strengths.

In addition, 42 billion yuan in award funds was allocated to support local governments in granting permanent urban residency to people who have moved from rural areas to cities, as part of efforts to advance people-centered urbanization.

Fiscal policy also focused on improving environmental protection and ecological conservation. Authorities introduced new guidelines for trans-regional ecological compensation mechanisms and supported initiatives aimed at controlling air, water and soil pollution.

Programs were also implemented to promote the integrated conservation and restoration of ecosystems, including mountains, rivers, forests, farmland, grasslands and deserts.

Spending on public wellbeing continued to increase. Education expenditure rose by 3.2%, bringing total spending in the national general public budget to 4.34 trillion yuan.

Authorities also implemented policies to promote employment. A total of 12.67 million urban jobs were created during the year.

Healthcare spending was expanded as well. Government subsidies for basic medical insurance for rural and non-working urban residents increased to 700 yuan per person annually, while subsidies for basic public health services rose to 99 yuan per person.

Support measures were also introduced for childcare services. Approximately 100 billion yuan in national government funds was allocated for subsidies for children under the age of three at a basic rate of 3,600 yuan per child annually, benefiting more than 30 million children.

Pension benefits for retirees were increased by 2%, while the minimum basic old-age benefits for rural and non-working urban residents were raised by 20 yuan per person per month.

Fiscal authorities also strengthened debt management during the year. Measures were introduced to unify the management of central and local government debt and to address hidden debt risks. A total of 2 trillion yuan in local government bonds was issued to replace existing hidden debts, reducing the average cost of debt interest payments by more than 2.5 percentage points.

Authorities also advanced fiscal management reforms. Pilot programs for zero-based budgeting were launched in 16 central government departments to improve the efficiency of public spending and reduce unnecessary expenditure items.

Additional reforms included adjustments to tax policies, improvements to government procurement rules and stronger accounting oversight to enhance fiscal discipline and financial management.

Credit: INP-WealthPk