China to ramp up fiscal support for consumption in 2025

BEIJING – China will ramp up fiscal support for consumption in 2025 by raising pensions and medical insurance subsidies for residents as well as expanding consumer goods’ trade-ins, its finance ministry said on Dec 24.

The country will boost the basic pension for retirees and for urban and rural residents. It will raise financial subsidy standards for urban and rural residents’ medical insurance to help “vigorously” boost consumption, the ministry added after concluding a two-day national fiscal work conference.

Beijing will also intensify support for consumer goods’ trade-ins and expand effective investment and drive more social investment through government investment.

The measures will improve people’s livelihoods and the policy system to support population growth as well as strengthen the social security network and healthcare system, the ministry noted.

Fiscal spending will enhance technological innovation capabilities and fully support the research and development of key core technologies and promote industrial upgrading, it added.

At an agenda-setting meeting in December, Chinese leaders

pledged to increase the budget deficit, issue more debt and loosen monetary policy

to maintain a stable economic growth rate as it girds for more trade tensions with the US when Donald Trump returns to the White House.

Chinese authorities have agreed to issue three trillion yuan (S$558.5 billion) worth of special treasury bonds in 2025, Reuters reported on Dec 24, citing two sources. That would be the highest on record as Beijing ramps up fiscal stimulus to revive a faltering economy.

Reuters reported last week that Chinese leaders agreed to raise the budget deficit to 4 per cent of gross domestic product in 2025, its highest on record, while maintaining an economic growth target of around 5 per cent. REUTERS