China will pursue a more proactive fiscal policy this year, with the projected deficit-to-GDP ratio set at around 4 percent for 2026, the same as last year, according to the Government Work Report submitted on Thursday to the national legislature for deliberation. 

That implies a deficit scale of 5.89 trillion yuan ($855 billion) – an increase of 230 billion yuan from the previous year.

The Government Work Report said China will issue 1.3 trillion yuan in ultra-long-term special treasury bonds this year, aimed at funding programs for large-scale equipment renewals and trade-in deals for consumer goods, as well as further support for major national strategies while building up security capacity in key areas. Additionally, 300 billion yuan of special treasury bonds will be issued to support and replenish capital in large State-owned commercial banks.

This year, 4.4 trillion yuan of local government special-purpose bonds will be issued, mainly for the construction of key projects, hidden debt swaps, and the settlement of overdue payments owed by governments, the report said.

Despite facing pressures and difficulties, experts said the country still has sufficient fiscal policy tools and ample flexibility to navigate a more complex external environment and global headwinds.

They said the country is pursuing a more proactive fiscal policy this year, with the aim to achieve the annual growth target and strengthen the growth momentum for medium and long-term development.

"That implies China's macroeconomic policy is set to be 'more proactive, more expansionary and more stimulative' with a particular focus on securing a strong start in the first quarter this year," said Xiong Yuan, chief economist at Guosheng Securities.

Zhang Jun, chief economist at China Galaxy Securities, said that as China continues to implement a more proactive fiscal policy in 2026, he expects to see an optimized spending direction with stronger support for domestic demand and technology and a front-loaded implementation pace to ensure funds are disbursed early and used quickly. 

ouyangshijia@chinadaily.com.cn