China Unveils Fiscal Reform Blueprint for 15th Five-Year Plan
China’s Ministry of Finance has laid out a comprehensive fiscal reform agenda for the 15th Five-Year Plan period (2026-2030), outlining six priority areas designed to build a stronger, more sustainable fiscal system that supports the country’s modernization goals. The briefing, delivered at a State Council Information Office press conference on August 21, comes as China pursues a “more proactive” fiscal policy with record government spending.
Vice Minister of Finance Liao Min told reporters that during the new five-year period, the ministry will strive to achieve six “furthers”: strengthening fiscal capacity, optimizing expenditure structure, improving macro-control effectiveness, deepening fiscal and tax system reform, enhancing scientific fiscal management, and resolving risks in key fiscal areas, according to Xinhua News.
Record Fiscal Expansion in 2026
The press conference highlighted the scale of China’s current fiscal expansion. Budgeted fiscal expenditure for 2026 has exceeded 30 trillion yuan for the first time in history, while newly issued government bonds reached 11.89 trillion yuan — the largest scale ever recorded. Central government transfer payments to local governments surpassed 10 trillion yuan for the fourth consecutive year, reaching 10.42 trillion yuan, as reported by China Daily.
These figures build on the strong performance of the 14th Five-Year Plan period (2021-2025), during which national general public budget revenue totaled 106 trillion yuan and expenditures reached 135 trillion yuan — both representing substantial increases compared to the previous five-year period, according to the Ministry of Finance.
Building a Modern Fiscal Macro-Control Mechanism
Liao emphasized that fiscal policy must adapt to evolving economic conditions. “The direction and logic of macro-control should be adapted to the economic scenario,” he said. During the 15th Five-Year Plan period, the Ministry of Finance will accelerate the construction of a modern fiscal macro-control mechanism characterized by precise policy, diverse tools, strong guidance, and efficient coordination.
The approach involves four key principles: maintaining the “seek progress while ensuring stability” tone, balancing aggregate and structural considerations, coordinating supply-side and demand-side efforts, and integrating policy tools across fiscal, monetary, industrial, and regional dimensions, as detailed in the government briefing.
Fiscal-Financial Coordination Delivers Results
A centerpiece of the 2026 policy framework is the innovative fiscal-financial coordination package — six policy tools backed by 100 billion yuan in central fiscal funds designed to boost domestic demand. Since their introduction seven months ago, these measures have benefited approximately 113 million residents and 6.22 million enterprises, mostly small and medium-sized businesses, Liao reported.
From January to July, the six tools supported over 20 trillion yuan in new credit issuance — an increase of more than 880 billion yuan (4.5 percent) year-on-year. Four investment-promotion policies supported approximately 1.51 trillion yuan in private investment, while two consumption-promotion policies supported approximately 1.88 trillion yuan in resident consumption, according to the China Securities Journal.
“Expanding domestic demand is not a stopgap measure but a strategic move,” Liao said, noting that the policy tools have achieved a “1+1>2” effect through the transmission chain of fiscal guidance, financial investment, and market operation.
Effective August 1, the policies were optimized with three key improvements: expanded subsidy scope to include new categories of credit card installment purchases and working capital loans, increased handling institutions from roughly 100 to about 400, and higher loan and credit limits for eligible businesses and consumers.
Investment in People and Livelihoods
Budget Director General Wang Xinxiang emphasized the government’s commitment to improving people’s livelihoods. The national general public budget has allocated 12.4 trillion yuan for education, social security, healthcare, housing, and other livelihood areas — an increase of 5.4 percent year-on-year, one percentage point higher than total expenditure growth.
“The finance department keeps the people at heart, adheres to doing our best according to our capabilities, and focuses on the urgent difficulties of the people,” Wang said. “‘Real gold and silver’ is invested more solidly, and policy measures are implemented more accurately.”
More than 25 million infants and their families received parenting subsidies in 2026, while about 24 million kindergarten children benefited from waived tuition and nursery fees for their final year of preschool, as reported by Bastille Post.
Supporting Technological Self-Reliance
Li Xianzhong, Director General of the Comprehensive Department, outlined plans to strengthen fiscal support for science and technology. Central fiscal spending on science and technology is budgeted to increase by 10 percent year-on-year in 2026, with 200 billion yuan in ultra-long special treasury bonds allocated for large-scale equipment renewal.
“The central fiscal will further focus on basic research, applied basic research, and national strategic science and technology tasks, continue to increase investment, while guiding local governments and social forces to increase R&D investment,” Li said.
International Engagement and Tariff Reform
Cheng Zhijun, Director General of the Department of International Economic Relations, announced plans to accelerate the establishment of a scientific and efficient modern tariff system to support a higher-level open economic system. This includes dynamically adjusting import provisional tax rates, supporting the Hainan Free Trade Port, and deepening international economic cooperation.
2026 marks the “APEC China Year,” with China serving as host for the third time. The APEC Finance Ministers’ Meeting is scheduled for October in Hong Kong, following successful deputy-level and senior officials’ meetings in Shanghai and Chengdu earlier this year, according to the SCIO English website.
Outlook for the Second Half
Looking ahead, Liao confirmed that over 2 trillion yuan in local government special bonds and ultra-long-term special treasury bonds remain to be issued and used in the second half of 2026. “This scale is also relatively large compared to previous years and can maintain policy intensity,” he said.
Fiscal policy in the second half will focus on three areas: accelerating fund utilization, intensifying efforts to expand domestic demand, and strengthening fiscal reform and management. The ministry also signaled that additional incremental policies will be introduced based on macroeconomic conditions.
“Based on the operating conditions of the macroeconomy, the Ministry of Finance will promptly plan and introduce practical and effective incremental policies to provide strong support for achieving an effective improvement in the quality of the economy and reasonable growth in its quantity,” Liao said, as noted by Global Times.
What to Watch
The 15th Five-Year Plan represents a critical period for China’s economic transformation. Key indicators to monitor include the pace of special bond issuance in the coming months, the rollout of new fiscal-financial coordination measures, and the October APEC Finance Ministers’ Meeting in Hong Kong, which will showcase China’s approach to international economic governance.
As the ministry works to balance economic growth with fiscal sustainability, the effectiveness of these reforms will be measured by their ability to support technological innovation, improve livelihoods, and maintain stability in an increasingly complex global economic environment.