From CNBC: 2025-03-04 19:40:00

China announced plans to increase its fiscal deficit to around 4% of GDP, up from 3% last year. This move comes amid a trade war with the U.S. President’s administration. The prior high was 3.6% in 2020. The country is also expected to triple special sovereign bond sales and increase local government bond issuance.

In November, China revealed a 10 trillion yuan support package over five years to address local government debt issues. The real estate market slump has impacted revenue, leading to financial struggles for local governments. Calls for more fiscal stimulus have grown due to lackluster consumption and slow overall growth.

The Chinese Minister of Finance indicated a significant space for a deficit increase, with the highest fiscal deficit on record since 2010. The target of 4% was widely anticipated. This shift in policy aims to combat economic challenges and debt problems while navigating the effects of the ongoing trade war with the U.S.

Read more: China targets fiscal budget deficit at around 4% of GDP