China ramps up fiscal spending to boost investment, consumption, and social welfare

China increased fiscal spending during the first half of 2025 as part of its proactive economic stabilization measures, the Ministry of Finance announced at a press briefing on Friday. The expanded expenditures targeted critical areas including infrastructure investment, consumption support, and social welfare protection.  

In the first six months of the year, the Chinese government accelerated bond issuances to fuel growth, approving 2.6 trillion yuan ($358 billion) in new local government general and special bonds to finance major infrastructure projects and regional development initiatives. In a separate move to strengthen the financial sector's capacity to support economic activity, authorities issued 500 billion yuan in special sovereign bonds to recapitalize four major state-owned commercial banks.  

On the social welfare front, fiscal policies were deployed to enhance living standards through multiple channels. The government raised basic pension payments, increased subsidies for public health services and medical insurance systems, and expanded funding for education access and student aid programs. New family support measures included childcare subsidies and pilot programs for free preschool education.  

To stimulate domestic consumption – a key growth driver – authorities pre-allocated 162 billion yuan in special bond funds across two tranches to subsidize household appliance trade-in programs and broaden the eligibility criteria, effectively reducing costs for consumers.  

Fiscal transfers to local governments grew 7.5 percent year on year to 2.73 trillion yuan, strengthening grassroots financial capacity. The central government simultaneously guided localities to restructure implicit debt, alleviating repayment and interest burdens for regional administrations.  

These coordinated measures demonstrate China's multifaceted approach to maintaining economic stability while addressing both immediate challenges and long-term development needs. The ministry emphasized its commitment to flexible, targeted fiscal policies adapted to evolving economic conditions.