Strengthening Efforts to Expand Domestic Demand and Benefit People's Livelihoods! Finance Ministry's Major Report Releases Multiple Key Signals

On March 17, the Ministry of Finance released the “2025 China Fiscal Policy Implementation Report” (hereinafter referred to as the “Report”), which introduces the implementation of fiscal policies in 2025 and looks ahead to 2026.

The Ministry of Finance stated that this year, it will continue to implement more proactive fiscal policies with increased precision and effectiveness, optimize incremental measures, revitalize existing assets, focus on expanding domestic demand, improving structure, boosting momentum, and benefiting people’s livelihoods. It will also focus on stabilizing employment, enterprises, markets, and expectations.

The Government Work Report places “building a strong domestic market” as the top task for this year, with “implementing special actions to boost consumption” highlighted prominently. This is the second consecutive year that expanding domestic demand has been prioritized as the primary task in the government work report.

The “Report” lists seven key areas of work for this year, with supporting the development of a strong domestic market ranked first.

The “Report” states that continued issuance of ultra-long-term special national bonds will be used for “dual” construction and “two new” projects, among other initiatives, and policy implementation will be optimized. It will implement a comprehensive set of fiscal and financial coordinated policies to stimulate domestic demand, focusing on two key areas: encouraging private investment and promoting household consumption. It will support reducing corporate financing costs, enhancing residents’ consumption capacity, and expanding high-quality service supply. It will deepen the implementation of special actions to boost consumption and promote service consumption quality improvement and benefits for the people. The management of the “negative list” for the use of special bonds will be improved, guiding relevant localities to carry out pilot work of “self-review and spontaneous review.”

At the press conference on the fourth session of the 14th National People’s Congress, Minister of Finance Lan Fongan explained that, in response to insufficient consumer vitality and weak growth of private investment, the central government has specially allocated 100 billion yuan this year. It has launched a package of six policies to promote domestic demand through fiscal and financial coordination, with four targeted support measures for private investment and two for household consumption. Preliminary estimates suggest that this trillion-yuan-level fiscal funding can support trillions of yuan in credit, achieving a “small push to produce a large effect.”

Regarding people’s livelihoods, the “Report” mentions strengthening employment assistance, stabilizing and expanding employment for key groups. It will further increase fiscal investment in education, implement policies to gradually provide free preschool education, and ensure student financial aid. The per capita fiscal subsidy standard for urban and rural residents’ basic medical insurance will be raised, along with improving healthcare service capacity and security levels. The social security system will be improved, including increasing basic pensions for urban and rural residents. It will implement subsidies for elderly with moderate or higher disabilities receiving elderly care services. It will also implement a parental subsidy system and promote the construction of a tiered and categorized social assistance system.

Yuan Haixia, Director of the China Chengxin International Research Institute, told JiJie News that in terms of fiscal expenditure structure, the new stage of the “14th Five-Year Plan” should be used as an opportunity to optimize fiscal expenditure, improve efficiency, and promote a close integration of investment in physical assets and human capital, as well as a healthy interaction between consumption and investment. As the investment structure shifts from mainly “investment in physical assets” to a balanced focus on “investment in people” and “investment in physical assets,” China’s fiscal expenditure structure should gradually transition from a construction-oriented fiscal policy to a livelihood-oriented fiscal policy.

Technological innovation can foster new industries, new models, and new momentum, serving as a core element for developing new productive forces. Besides expanding domestic demand and benefiting people’s livelihoods, the “Report” also reveals fiscal support points for technological innovation.

The “Report” mentions supporting the cultivation and expansion of new momentum. It will implement a rolling plan for high-quality development of key manufacturing industry chains. It will organize the third batch of pilot cities for technological transformation in manufacturing. Using special funds, government investment funds, and financing guarantees, it will support the development of high-tech enterprises and tech-based small and medium-sized enterprises. It will continue to implement fiscal awards and subsidies for “specialized, refined, distinctive, and innovative” SMEs.

The “Report” also states that efforts will be made to increase investment, establish a diversified mechanism for technological innovation funding, and leverage more social capital and financial resources into technological innovation. The structure of science and technology expenditure will be optimized, with a focus on basic research, applied basic research, and national strategic technological tasks, to stimulate innovation and creativity.

The “14th Five-Year Plan” outline emphasizes “building a modern industrial system” as a top priority, highlighting that, amid intensified external technological competition and global industrial chain restructuring, the real economy—especially advanced manufacturing—has become the core support for stabilizing growth, ensuring security, and cultivating new productive forces.

Zhang Jun, Chief Economist at China Galaxy Securities, told JiJie News that, at this critical window of easing China-U.S. relations, it is necessary to accelerate the construction of a modern industrial system, promote the integration of technological and industrial innovation, and speed up the cultivation of new momentum.

“Based on the draft of the ‘14th Five-Year’ plan, future policies will further strengthen basic research, tackle key core technologies, and build systems for results transformation, encouraging enterprises to become innovation drivers through comprehensive policy tools,” Zhang Jun said.