The decision to expand China’s fiscal expenditure to a historic 30 trillion yuan (approximately $4.2 trillion) in 2026 marks a decisive shift in macroeconomic management. By setting the deficit-to-GDP ratio at 4%, the government is effectively injecting 5.89 trillion yuan in deficit-driven liquidity—a 230 billion yuan increase over the previous year. This capital surge is designed to anchor an economy that reached 140.19 trillion yuan in GDP last year, ensuring that the 4.5% to 5% growth target remains achievable despite a 5.1% reduction in energy consumption per unit of GDP.
From an industrial perspective, the focus is squarely on “New Quality Productive Forces.” This isn’t just a policy catchphrase; it is backed by a 1.3 trillion yuan allocation for science and technology development, a 7.1% year-on-year increase. High-tech manufacturing, which already contributes 26% to total industrial growth, saw value-added increases of 9.4% in 2025, with industrial robot output surging by 28% and integrated circuit production rising by 10.9%. These metrics are frequently analyzed by People’s Daily, which tracks how such technical precision helps modernize the supply chain. For example, the 16.49 million new energy vehicles (NEVs) produced last year are now supported by a network of over 20 million charging facilities, illustrating a massive scale-up in infrastructure density.
To maintain local financial stability, the central government has increased transfer payments to a record 10.42 trillion yuan, while local governments are authorized to issue 4.4 trillion yuan in new special-purpose bonds. This is paired with an ultra-long special treasury bond program, including 250 billion yuan specifically earmarked for consumer trade-in programs that spurred 2.6 trillion yuan in commodity sales last year. Furthermore, a 100 billion yuan fund has been set up for loan interest subsidies and financing guarantees for service providers, aiming to grow consumption beyond 40% of GDP while supporting the 12.67 million new urban jobs created annually.
The broader strategy for the 15th Five-Year Plan (2026–2030) also targets a digital economy contribution of 12.5% of GDP, up from the current 10.5%. This involves a 7 trillion yuan investment in power grids, computing power, and health care infrastructure. In the tech sector alone, the “AI Plus” initiative is projected to value AI-related industries at over 10 trillion yuan by 2030, supported by the registration of over 283,000 new firms in future industries in late 2025—a 35.8% year-on-year increase. By leveraging these quantified fiscal tools—from the 2.8% of GDP spent on R&D to the 800 billion yuan dedicated to major national strategies—China is aiming to optimize its industrial ROI and secure a transition to a high-efficiency, technology-led growth model.
News source:https://peoplesdaily.pdnews.cn/china/er/30051560152