Overview

Since the beginning of 2025, in the face of an increasingly complex and challenging external environment, all regions and departments, under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, adhered to Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, fully implemented the guiding principles of the 20th CPC National Congress and the second and third plenary sessions of the 20th CPC Central Committee, and acted in accordance with the decisions and arrangements of the Central Economic Work Conference and the Government Work Report. We have maintained the general principle of pursuing progress while ensuring stability, fully implemented the new development philosophy in an accurate and comprehensive manner, coordinated both domestic and international imperatives, and balanced development and safety. We accelerated the implementation of more proactive and effective macro policies and strengthened counter-cyclical adjustments. China’s economy has demonstrated strong vitality and resilience, and new progress has been made in promoting high-quality development. Fiscal policy has become more proactive and sustained, focusing on stabilizing employment, enterprises, markets, and expectations, while there is growing synergy with other macro policies to support the steady recovery and sustained growth of the economy.

First, we supported the expansion of domestic demand in an all-round way. We placed greater emphasis on boosting consumption. A total of 300 billion yuan in in ultra-long-term special treasury bonds has been allocated to support the trade-in program for consumer goods, with the scope of subsidies further expanded. In the first half of the year, the program drove total sales of 1.6 trillion yuan across all eligible product categories. We promoted the integration of livelihood improvement and consumption stimulation, with a focus on employment-led income growth, continuously enhancing social security and strengthening consuming capacity and consumer confidence. We actively expanded effective investment. We coordinated the use of ultra-long-term special treasury bonds, local government special-purpose bonds, and central budget investment, with government investment directed toward key areas and weak links to enhance investment benefits. We made efforts to implement the Action Plan for the Reinforcement and Upgrading of Industrial Chains for National Comprehensive Freight Hubs and to support technological transformation in manufacturing. We also issued special treasury bonds to help large state-owned commercial banks replenish core tier-one capital, further improving their capacity to serve the real economy.

Second, we advanced the implementation of major national strategies. We accelerated the development of new quality productive forces. In 2025, central government expenditure on science and technology reached 398.119 billion yuan, a year-on-year increase of 10 percent, with more funds channeled to basic research, applied basic research, and major national scientific and technological tasks. We supported the implementation of actions for high-quality development of key industrial chains in manufacturing and facilitated industrial transformation and upgrading. We took solid steps to advance all-round rural revitalization. Efforts were intensified to ensure stable production and supply of grain and other key agricultural products, consolidate and expand the achievements of poverty alleviation, and strengthen industry and employment-oriented assistance. We worked to promote coordinated regional development by supporting major cross-regional projects, advancing the construction of the Hainan Free Trade Port, and accelerating development in old revolutionary base areas, ethnic areas, border areas, and resource-depleted regions. We effectively supported ecological progress by intensifying ecological protection and restoration, steadily advancing efforts toward carbon peaking and carbon neutrality, and improving the cross-regional ecological compensation mechanism.

Third, we made efforts to ensure and improve people’s livelihoods. We effectively utilized a combination of policies, including tax and fee reductions, employment subsidies, and job stabilization rebates to better stabilize and expand employment. We promoted the expansion and improvement of educational resources, advanced the high-quality and inclusive development of pre-school education, the balanced and high-quality development of compulsory education, and the diversified development of senior high schools, while refining student financial aid policies. We continued to raise per-capita government subsidies for basic public health services and medical insurance for urban and rural residents. The national minimum standard for basic pensions of urban and rural residents has been increased, and nationwide pooling and adjustment of basic pension insurance have been steadily advanced to ensure that pensions are paid in full and on time. We strengthened the development of inclusive childcare services, established a childcare subsidy system, and promoted the expansion of affordable elderly care services. Benefits and living subsidies for eligible groups have been implemented to ensure the basic livelihoods of people in difficulty. We reinforced the emergency response capacity at the grassroots level, promptly allocated central government funds for disaster relief, and supported emergency rescue and assistance for disaster-stricken populations.

Fourth, We effectively prevented and defused risks in key areas. We allocated more fiscal resources to lower-level governments and improved the tiered guarantee responsibility system to ensure funding for the “three priorities”, namely people’s basic well-being, payment of salaries and normal government functioning, so as to maintain overall stability in local fiscal operations. We have implemented a package of policies to defuse debt risks, utilized debt-quota allocations in advance, and took multiple measures to reduce hidden debt. The reform and transformation of local government financing platforms have been accelerated. We coordinated efforts to prevent and defuse major financial risks. By combining the use of local government special-purpose bonds, special funds, and tax policies, we have helped stabilize the real estate market and support its gradual recovery.

Fifth, we strengthened fiscal management in a scientific way. We deepened reforms of the fiscal and taxation systems across the board, improved the modern budget system, strengthened the coordination of fiscal resources, intensified zero-based budgeting reform, and continued to develop the system of expenditure standards. We improved the tax system by advancing the reform to shift the collection of consumption tax on certain items to later stages and allocate revenues thereof to local governments. We also made active progress in the legislation on consumption tax and value-added tax. The fiscal framework was optimized by improving the transfer payment system, enhancing the incentive and constraint mechanism of transfer payments for promoting high-quality development, and deepening reform of the fiscal systems below the provincial level. We upheld the principle that Party and government institutions must live on a tight budget, launched pilot programs for scientific fiscal management, strengthened fiscal and accounting supervision, and improved the overall effectiveness of fiscal governance.