China Expands Fiscal Policy Amid Economic Challenges

China is set to implement a 'very proactive' fiscal policy in 2025, with plans to increase its deficit-to-GDP ratio and issue more government bonds to bolster economic growth. Vice Finance Minister Liao Min emphasized that the government has ample fiscal resources to address both domestic and external challenges, particularly in light of potential economic strains from Donald Trump's administration. Analysts anticipate the deficit ratio could rise to as high as 4 percent, up from the typical 3 percent, to enhance public spending and stimulate domestic demand. Special bonds will be sold to fund infrastructure projects and consumption incentives, amid concerns over increasing U.S. tariffs on exports. Additionally, the government aims to synchronize fiscal and monetary policies to effectively stimulate investment and economic stability. Details on the official deficit will be revealed during the National People's Congress in March.