China's government work report for 2025 reveals plans to raise the fiscal deficit-to-GDP ratio to 4%, up one percentage point from previous projections. The move underscores Beijing's commitment to bolstering economic momentum through targeted fiscal measures, according to ANZ Greater China Chief Economist Raymond Yeung.
In an interview with CGTN reporter Wang Tianyu, Yeung emphasized that the deficit expansion reflects a strategic shift toward 'proactive policy support' to address domestic challenges and global uncertainties. He noted the alignment with China's broader goals of stabilizing growth while advancing structural reforms in sectors like green energy and advanced manufacturing.
The policy shift comes amid renewed efforts to stimulate domestic consumption and attract overseas investment, particularly from businesses in Hong Kong and other Asian regions. Analysts suggest the deficit plan could strengthen infrastructure projects and tech innovation initiatives, offering opportunities for investors tracking Asia's evolving economic landscape.
While fiscal expansion raises questions about debt sustainability, Yeung highlighted China's 'substantial policy buffer' and disciplined monetary framework as stabilizing factors. The announcement has drawn attention from global markets, with particular focus on spillover effects for ASEAN trade partners and supply chain dynamics.
