Ministry Of Finance: Boost Consumption And Expand Effective Investment In 2026

The National Fiscal Work Conference convened in Beijing on December 27–28 to review fiscal performance in 2025 and to set priorities for 2026. Lan Fo’an, Party Secretary and Minister of Finance, presented the official work report, which assessed last year’s fiscal achievements and outlined the government’s policy orientation for the year ahead. The conference concluded that fiscal policy played a decisive role in meeting 2025’s economic and social objectives and that, over the course of the 14th Five‑Year Plan, fiscal measures have become an increasingly important pillar supporting China’s modernization agenda.

The conference affirmed that fiscal policy in 2026 will remain more proactive, with an emphasis on expanding the scale of public spending to ensure that essential expenditures are fully met. The work program for the coming year emphasizes domestic demand as the primary driver of growth and calls for vigorous measures to stimulate consumption. Fiscal resources will be directed toward strengthening new productive forces and promoting comprehensive human development, while accelerating the cultivation of new growth drivers through increased support for science and technology. At the same time, the agenda stresses the need to reinforce basic protections and safety nets to promote employment and raise household incomes.

To enhance fiscal capacity and local fiscal autonomy, the conference instructed finance departments at all levels to adhere to the principle of pursuing progress while maintaining stability, with high‑quality development as the central objective. Authorities were asked to better coordinate domestic economic management with international trade challenges and to balance development objectives with security considerations. The policy guidance calls for improving the precision and effectiveness of fiscal measures, optimizing new spending while mobilizing existing resources, and concentrating efforts on expanding domestic demand, improving economic structure, strengthening momentum, and safeguarding livelihoods. Stabilizing employment, supporting enterprises, maintaining market order and anchoring expectations are highlighted as immediate priorities, alongside advancing reform, strengthening fiscal management, preventing risks and improving fiscal efficiency.

The conference set out a package of fiscal measures for 2026 that include expanding the overall fiscal expenditure envelope to guarantee necessary spending; optimizing the composition of government bond instruments to enhance financing effectiveness; improving the efficiency of transfer payments to increase the discretionary fiscal capacity of local governments; continuing to refine expenditure structure to strengthen support for priority areas; and deepening fiscal‑financial coordination to amplify policy impact. In the view of Xie Yihao, a researcher at the Behavioral Experimental Fiscal and Tax Research Center of Renmin University of China, the public sector must assume a more active role as a creator of demand and a leader of long‑term investment during this critical phase of economic transformation and external complexity. Xie emphasized that fiscal policy should move beyond a purely cyclical safety‑net function and align deficit sizing with medium‑ and long‑term strategic investment needs.

On the composition of government bond tools, the conference signaled a shift toward institutionalizing ultra‑long special treasury bonds for strategic, long‑term projects, while directing local government special bonds to broaden their focus from traditional infrastructure toward industrial infrastructure that supports new productive forces, urban renewal initiatives and targeted livelihood investments described as “effective investment.”

The fiscal agenda for 2026 places strong emphasis on boosting consumption and expanding effective investment. Policy directives call for a comprehensive campaign to stimulate household spending, coupled with stepped‑up public investment in areas that underpin new productive capacity and human capital development. The government will accelerate construction of a unified national market and standardize tax incentives and fiscal subsidy policies to support market integration.

Support for innovation and industrial upgrading is another central theme. The conference called for increased fiscal funding for science and technology, improved management of fiscal science budgets, and measures to reinforce enterprises as the primary engines of innovation. The government will implement actions to promote high‑quality development across key manufacturing chains, pilot new‑generation manufacturing transformation in selected cities, and expedite the formation of a modern industrial system.

Regional development and urban‑rural integration remain priorities. The conference reiterated commitments to advance rural revitalization, promote people‑centered new urbanization, and strengthen coordinated regional development to expand development space across the country.

Strengthening social protection and basic public services is a further focus. Fiscal policy will aim to consolidate basic guarantees and safety nets, promote employment and income growth, support improvements in education and healthcare services, and refine the social security system so that meeting livelihood needs also creates room for development.

Environmental and low‑carbon objectives are integrated into the fiscal program. The conference emphasized accelerating the green transformation of economic and social development, advancing pollution control and ecosystem restoration, and improving policy support for green and low‑carbon development so that carbon reduction, pollution control, greening and growth proceed in a coordinated manner.

Finally, the conference underscored the importance of international fiscal and financial cooperation and high‑level opening‑up. The government will pursue reforms in global economic and financial governance, deepen international partnerships, expand trade cooperation, and implement tax policies related to the operation of the Hainan Free Trade Port.

The meeting concluded with a call to strengthen fiscal governance and management, to continue implementing frugality requirements for Party and government organs, and to promote high‑quality fiscal development through rigorous oversight. Authorities were instructed to combine risk resolution with the establishment of long‑term mechanisms, to maintain strict government debt management, and to pursue fiscal and tax reform with a balance of steady progress and prudent innovation.