Zheng Shanjie, head of the National Development and Reform Commission, Lan Fo'an, minister of finance, Wang Wentao, minister of commerce, Pan Gongsheng, governor of the People's Bank of China, and Wu Qing, chairman of the China Securities Regulatory Commission, attend a press conference on economy for the third session of the 14th National People's Congress (NPC) in Beijing, capital of China, March 6, 2025. [Photo/Xinhua]

China will intensify its macroeconomic policy this year, with a significant increase in government spending and a greater focus on consumption and innovation to chart a path of steady growth amid a complex global landscape.

Senior government officials elaborated on specific pro-growth measures ranging from interest rate cuts to increased funding for small firms, at a press conference held Thursday on the sidelines of the third session of the 14th National People's Congress.

Stronger fiscal support 

China will have a 4-percent deficit-to-GDP ratio and a government deficit of 5.66 trillion yuan (about 790 billion U.S. dollars) in 2025, according to the government work report submitted to the national legislature for deliberation.

Both figures are at their highest levels in recent years, indicating strengthened counter-cyclical adjustment, Minister of Finance Lan Fo'an said at the press conference. The country will issue 4.4 trillion yuan of local government special-purpose bonds and 1.3 trillion yuan of ultra-long special treasury bonds.

Analysts believe the expanding fiscal expenditure will shore up sustained economic and social development.

There will be over 5 trillion yuan of government spending on construction investment this year, said Zheng Shanjie, head of the National Development and Reform Commission.

"We will support private enterprises in investing in emerging and future industries, and introduce a number of attractive major projects in areas such as railways, nuclear power, water conservancy, and major scientific and technological infrastructure," Zheng said.

Supportive monetary policy 

China will cut reserve requirement ratios (RRRs) and interest rates when appropriate this year, in line with domestic and international economic and financial conditions, as well as the performance of financial markets, said Pan Gongsheng, governor of the People's Bank of China, the country's central bank.

The average RRR for China's financial institutions now stands at 6.6 percent, and there is still room for further reduction, Pan said.

According to the government work report, China will adopt a moderately loose monetary policy this year.

Pan said the central bank will utilize multiple tools to offer adequate liquidity and bring down financing costs.

Strengthened supportive measures will be seen in key areas and weak links including green finance, micro and small firms, and pension finance, Pan said.

Consumption as primary driver 

As consumption continues to serve as the primary driving force for the economy, improving consumer sentiment will remain high on the government's work agenda.

Zheng said that government funding for the national consumer goods trade-in program will increase from 150 billion yuan last year to 300 billion yuan in 2025.

The trade-in program, launched a year ago, has played a vital role in revitalizing consumer markets. In 2024, it led to sales exceeding 1.3 trillion yuan, including over 6.8 million vehicles, 56 million home appliances and 1.38 million e-bikes.

There will also be further policies to bolster services consumption this year, Commerce Minister Wang Wentao said, citing measures to open the telecom, medical services and education sectors, and to increase the diversified supply of health, elderly care, child care and domestic services.

More efforts will be made to innovate services consumption scenarios to meet people's diversified and high-quality consumption needs in an improved manner, Wang said.

Dynamic forces 

With its remarkable progress in technological innovation in 2024, the country will step up efforts to drive the development of new quality productive forces this year.

Zheng said that China will establish a national venture capital guidance fund to drive nearly 1 trillion yuan of local and private funds to invest in tech firms in a market-oriented manner.

Efforts will also be made to nurture a talent pool, including strategic scientists, outstanding entrepreneurs, top-tier engineers, master artisans and other highly skilled professions, Zheng said, adding that an open and inclusive innovation ecosystem will be created.

From AI models like DeepSeek to humanoid robots and intelligent cars, China continues to make significant technological strides. Last year, high-tech manufacturing and equipment manufacturing accounted for 16.3 percent and 34.6 percent of China's total industrial output, respectively.

Defusing local debt risk 

In 2024, China unveiled a major local government debt replacement program worth 6 trillion yuan, with an annual quota of 2 trillion yuan from the same year. The program allows local governments to issue new bonds to replace hidden debts.

Bonds issued through the program last year saw an average reduction in local debt interest rates of over 2.5 percentage points. It is estimated that these bonds will reduce interest payments by over 200 billion yuan over five years, significantly easing funding pressures and interest costs for local governments, Lan noted.

China's local government debt risks have been effectively mitigated, he said.

With eased debt burdens, local governments are capable of earmarking more funds for education and health care to improve people's well-being and supporting technological innovation and consumption for high-quality development, analysts said.

Lan said that the Ministry of Finance will guide the timely replacement of local debts this year, promote the transformation of local financing vehicles, and resolutely curb new hidden debts.