(Yicai) Oct. 30 -- Newly approved proposals for China’s forthcoming 15th Five-Year Plan, a development roadmap through 2030, introduce revised fiscal and monetary policy language that analysts say mark a shift in economic strategy for the coming years.

Unlike the 14th Five-Year Plan, the recommendations for its successor do not set a specific economic growth target, but instead call for keeping growth “within a reasonable range” and "a significant increase” in consumption as a share of gross domestic product.

To deliver those outcomes, the proposals call for deploying a proactive fiscal policy, enhancing fiscal sustainability, speeding up the building of a financially strong nation, and reinforcing both counter-cyclical and cross-cycle macro adjustments.

The full text of the Suggestions on Formulating the 15th Five-Year Plan for National Economic and Social Development was released on Oct. 28 following adoption by the fourth plenary session of the Central Committee of the Communist Party of China.

The proposals suggest that fiscal and monetary policy will remain stable and maintain continuity to prevent risks such as high inflation, excessive government debt, and potential financial instability, said Wang Qing, chief analyst at Golden Credit Rating International.

From the perspective of economic governance, a proactive fiscal policy means adjusting measures in line with changing conditions, said Yang Zhiyong, director of the Chinese Academy of Fiscal Sciences, adding that enhancing fiscal sustainability is even more crucial and is an important prerequisite for ensuring an effective fiscal policy.

The shift in fiscal language reflects a necessary response to new domestic and international conditions, said Prof. Liu Rong of Southwestern University of Finance and Economics. The change underscores the urgent need for counter-cyclical adjustments to steady growth, which involve expanding fiscal spending and subsidizing consumption, while at the same time normalizing debt management and optimizing spending structures, Liu added.

In terms of monetary policy, improving the central bank system is listed as a key task in the document. Pan Gongsheng, governor of the People’s Bank of China, said a preliminary framework has been drafted to split macroprudential assessment into two parts: monetary policy implementation and financial stability evaluation, with the aim of clarifying policy boundaries and enhancing regulatory precision.

Ensuring smooth monetary policy transmission is also a key task, Wang added, predicting that monetary policy will stay moderately accommodative, with greater reliance on price-based tools and continued efforts to reduce financing costs.

On the consumption front, China’s consumption-to-GDP ratio has long lagged that of other economies at similar stages of development, noted Qi Yunlan, a researcher at the Development Research Center of the State Council.

The proposed “significant increase” in consumption suggests a long-term strategy for boosting household incomes, strengthening the social security system, and improving supply levels.

Editor: Emmi Laine