Summary of Key Points
The State Council has released the 2025 Central Final Accounts Report, outlining six key fiscal priorities for the next phase: accelerating budget execution (especially the issuance of ultra-long-term special treasury bonds and targeted bonds), promoting domestic demand expansion, building a unified national market, ensuring people's livelihoods, stabilizing local finances, and strengthening scientific management. There is still room for increased fiscal expenditure, and efforts will be made to accelerate bond issuance and prepare additional policies to stabilize growth, promote fairness, and protect people's welfare.
Detailed Explanation
1. Accelerating Bond Issuance
The pace of fiscal expenditure in the first few months did not meet expectations (for example, the issuance of targeted bonds slowed down in April and May), and economic data also showed a slight cooling trend, so there is now a push to accelerate bond issuance:
- Ultra-long-term special treasury bonds: 572 billion yuan have already been issued, with another 728 billion yuan to be issued by October. Some of the funds have been allocated in advance to support programs such as "trade-in" schemes for household appliances and vehicles, allowing the money to reach local governments more quickly.
- Targeted bonds: 1.87 trillion yuan have been issued, with 2.53 trillion yuan remaining to be issued. The issuance speed increased significantly in June (372.3 billion yuan in a single month). These funds are mainly used for infrastructure and livelihood projects, directly boosting investment and stabilizing growth.
- Additional policy reserves: New policies may be introduced if needed (for example, an additional 500 billion yuan in targeted bonds were issued last year to fill gaps).
In short, the government aims to spend the reserved funds as quickly as possible to initiate projects and stimulate consumption.
2. Fiscal and Financial Collaboration to Stimulate Growth
A special fund of 100 billion yuan has been set up this year to promote domestic demand through a combination of interest subsidies, guarantees, and risk compensation:
- Interest subsidies: The government covers part of the loan interest for businesses (for example, reducing the interest cost by half when purchasing equipment).
- Guarantes: The government provides guarantees for businesses, reassuring banks about loan repayment, thus encouraging them to lend.
- Effect: To date, this has led to 8.8 trillion yuan in loans (a 4.2% increase from last year), benefiting 2.71 million businesses (especially small and micro enterprises) and more than 54 million individuals (for example, through consumer loans).
This initiative is like building a bridge to channel funds to where they are needed, thereby stimulating consumption and investment.
3. Restricting Unregulated Subsidies at the Local Level
To create a fairer national market, a negative list of fiscal subsidies has been implemented:
- Contents of the list: Clearly defines which subsidies are not allowed (for example, avoiding competitive practices that harm other regions).
- Benefits:
1. Local competition will no longer rely on excessive spending but on improving business environments (e.g., faster service delivery and better customer support).
2. Businesses can freely choose where to locate, contributing to a unified national market.
3. Local governments have less financial pressure and can allocate more funds to essential services such as education and healthcare.
In other words, local governments can no longer rely on cash incentives to attract businesses but must focus on providing quality services to retain them.
4. Ensuring People's Livelihoods and Stable Local Finances
In addition to promoting growth, the government also focuses on maintaining basic welfare:
- Livelihood support: Continuing to fund public services such as pension, healthcare, and education, including providing assistance to vulnerable groups.
- Local finances: Ensuring that local governments have sufficient funds to pay salaries and provide community services (to prevent situations where salaries cannot be paid).
- Scientific management: Strictly adhering to budgetary guidelines and monitoring the use of funds (to prevent misappropriation and waste).
These measures are essential for maintaining stability in people's lives and ensuring the proper functioning of local governments.
Conclusion
The core of this fiscal policy is to increase efforts, standardize practices, and provide support for the vulnerable: accelerating bond issuance to stabilize growth, regulating subsidies to promote fairness, and ensuring that people's basic needs are met. The changes that ordinary citizens may notice include more affordable options when making purchases, easier access to business loans, more standardized local services, and improved welfare support.