In a bold move aimed at bolstering economic recovery, China's Ministry of Finance has introduced an expansive fiscal policy, allocating 700 billion yuan to fund 1,400 key projects across various sectors. This initiative underscores the government's commitment to revitalizing business and stabilizing the economy.

During a report presented at the current session of the Standing Committee of the National People's Congress, it was revealed that last year, China intensified its proactive fiscal measures and counter-cyclical policies to bolster economic growth. These efforts were designed to respond to both domestic challenges and global economic conditions.

In alignment with directives from the Political Bureau of the Communist Party of China Central Committee, the ministry is advancing measures from both supply and demand perspectives. This strategic approach emphasizes the swift implementation of new incremental fiscal policies, according to Minister of Finance Lan Fo'an.

Among the significant developments is the approval of an extra local government debt quota amounting to 6 trillion yuan, intended to replace implicit local government debts. With annual allocations of 2 trillion yuan slated from 2024 to 2026, the strategy aims to reduce outstanding implicit local debt significantly by the end of 2028.

This initiative is expected to enhance transparency regarding debts, alleviate fiscal burdens on local authorities, and provide greater scope for financial and policy support. Notably, the 2 trillion yuan quota for 2024 has seen swift issuance, accompanied by a reduction in average interest rates on the swapped debts by over 2.5 percentage points.

In its efforts to spur consumption and investment, the Ministry of Finance has launched new policy instruments, including the issuance of 1 trillion yuan in ultra-long-term special treasury bonds, alongside new regulatory frameworks for fund supervision.

Funding from these bonds will facilitate significant initiatives such as large-scale equipment renewals and consumer goods trade-in programs, which are vital to support national strategies and enhance the security capacity of essential sectors.

Specifically, out of the total investment, 700 billion yuan will be directed towards over 1,400 major projects focusing on areas like high-level scientific and technological independence, urban-rural integration, food and energy security, and ecological preservation. An additional 300 billion yuan will boost subsidies for vehicle scrappage and appliance trade-ins.

Last year alone, over 6.8 million vehicles and 62 million appliances were replaced, generating product sales exceeding 1.3 trillion yuan and resulting in a 15.7 percent rise in investment in equipment and tools.

The government is also enhancing the allocation of special-purpose bond quotas while expanding project reserves and accelerating the issuance and application of funding. In 2024, more than 40,000 projects have been financed, with over 350 billion yuan already applied as project capital.

Ongoing oversight for about 15,000 projects backed by treasury bonds issued in 2023 is continuing, especially focusing on post-disaster recovery and improving disaster response capabilities.

In addition, competitive selection processes have been initiated in key sectors; this includes infrastructure support for 12 cities to bolster national freight hubs, digital enhancements in transport across eight provincial-level regions, and the introduction of modern logistics pilots in 20 cities. Concurrently, tariff measures and policies to stimulate foreign trade and investment are being refined to stabilize trade and attract foreign investment.