(Yicai) Dec. 8 -- Economists expect China to extend its proactive fiscal policy with increased borrowing while placing greater emphasis on sustainability, stepping into the 15th Five-Year Plan (2026-2030).

Experts interviewed by Yicai said China should maintain a fiscal deficit ratio of no less than 4 percent next year to signal continued fiscal expansion and stabilize expectations. They also recommended moderately increasing the issuance of special treasury bonds and local government special bonds so that total new government borrowing in 2026 exceeds last year's CNY12 trillion (USD1.7 trillion), helping national general public budget expenditure growth remain aligned with expected economic growth.

The Political Bureau of the Communist Party of China said today, after a meeting to review next year’s economic priorities, that China will continue to implement a more proactive fiscal policy in 2026. The official stance is in line with market expectations, as 2026 marks the start of the 15th Five-Year Plan, and fiscal support is seen as essential amid weak effective demand and increasingly complex domestic and global conditions.

Yuan Haixia, director of the research institute of China Chengxin International Credit Rating, said the need for fiscal leverage is rising as 2026 is the first year of the 15th Five-Year Plan and requires a positive guiding role in terms of economic growth targets, adding that subdued demand makes a stronger fiscal push necessary.

Luo Zhiheng, chief economist at Yuekai Securities, said China’s economy showed resilience in 2025, with exports and the capital market outperforming expectations while real estate and consumption lagged, a pattern likely to continue next year. To further expand domestic demand, boost consumption, and stabilize the real estate market, it is necessary to implement a more robust fiscal policy to stabilize the economy and social employment, Luo said. Therefore, maintaining a more proactive fiscal policy tone is essential, he added.

Yuan noted that fiscal operations next year will likely remain in a tight balance defined by “low revenue growth alongside rigid expenditure,” meaning the government will still need moderate borrowing to bridge funding gaps. China’s government debt ratio remains lower than that of major economies, and the central government retains considerable borrowing capacity, she added.

Editor: Emmi Laine