China to Introduce New Fiscal Support Policies
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China to Introduce New Fiscal Support Policies
- China's Vice Finance Minister Liao Min announced on Friday, August 21, 2026, that new coordinated fiscal and financial policies will be introduced in the second half of the year to boost borrowing by businesses and consumers.
- This move comes as China's economic growth has reportedly fallen below the government's annual target of 4.5%-5% for 2026, with July data showing unexpected softening in industrial output, consumption, and investment.
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China is preparing to roll out additional fiscal support measures in the latter half of 2026 to counter a broadening economic slowdown. Vice Finance Minister Liao Min stated on Friday, August 21, 2026, that the government is studying and drafting new coordinated fiscal and financial policies aimed at stimulating borrowing by businesses and consumers. These measures are expected to be introduced in a timely manner, adapting to evolving economic conditions.
The impetus for these new policies stems from China’s economic growth veering below the government’s annual target of 4.5%-5% for 2026. Recent data for July indicated a broader slowdown, with industrial output, consumption, and investment all softening more than anticipated. Policymakers had already signaled a more supportive stance on the economy in late July, considering new stimulus after an abrupt weakening of growth.
The upcoming measures will build upon a program introduced earlier in 2026, which provided incentives such as discounted lending backed by fiscal subsidies and loan guarantees to encourage private investment. This existing program has already been expanded since August 1, 2026, to include more types of loans eligible for interest rate subsidies for small and micro businesses and consumers. During the first seven months of 2026, this fiscal package supported over 20 trillion yuan (approximately US$3 trillion) in new lending, marking an increase of more than 4% from 2025.
Liao Min emphasized that China will maintain the continuity and stability of its macroeconomic policies, planning and allocating fiscal resources over a longer timeframe. A greater share of fiscal spending will be directed towards households and consumption to shore up weak domestic demand. While signaling more support, officials are reportedly favoring calibrated, incremental measures over aggressive, large-scale stimulus packages. The government also plans to deepen fiscal and tax reforms and improve the budget management system.