China's Finance Ministry Pledges Countercyclical Adjustments and Budget Reform

China's Ministry of Finance has pledged to effectively leverage countercyclical adjustments and implement a more proactive fiscal policy in the second half of the year, according to a report by People's Daily. At a symposium held in Hefei, Anhui province, the ministry outlined five operational priorities to expand "fiscal scientific management" nationwide. Key directives include coordinating budget resources, deepening zero-based budgeting reforms, strengthening local government debt management, and safeguarding grassroots spending on basic public welfare and operations.

The announcement signals how fiscal authorities intend to navigate competing economic imperatives in the second half of the year. While markets look to Beijing for fiscal stimulus to support growth, policymakers are balancing countercyclical expansion against long-term financial sustainability. By emphasizing zero-based budgeting and strict debt management alongside proactive fiscal policy, the ministry is aiming to extract greater economic impact from existing revenues rather than relying solely on unrestrained balance-sheet expansion.

China's Ministry of Finance will strengthen countercyclical fiscal adjustments and execute a more proactive fiscal policy in the second half of the year, state-run People's Daily reported. The directives were announced during a symposium on "fiscal scientific management" held on August 26 in Hefei, the provincial capital of Anhui. According to the ministry's readout, authorities plan to expand pilot initiatives into a nationwide, institutionalized management framework designed to align with broader economic guidance from the central leadership. The gathering laid out five primary operational tasks to modernize fiscal administration while supporting sustained economic development. First, the ministry called for strengthened fiscal coordination. Officials were instructed to combine regular budget planning with the mobilization of existing fiscal assets and diverse policy tools. The objective is to secure necessary funding for major national strategic priorities and basic livelihood protections. Second, the ministry emphasized spending efficiency. The guidelines mandate deeper zero-based budgeting reforms—a process that requires agencies to justify all expenditures from scratch rather than adjusting baseline figures from prior years. The ministry also underlined stronger performance-oriented evaluations, tighter local government debt management, and the optimization of resource allocation. Third, authorities underscored institutional standardized governance. This includes refining operational standards, enhancing internal control mechanisms to enforce effective checks and balances, and building more targeted supervisory systems. Fourth, the framework highlights financial safety and sustainability. The ministry emphasized the importance of maintaining an appropriate macroeconomic tax burden, advancing local debt resolution efforts, and strictly maintaining the "three guarantees"—securing basic living standards, wages, and day-to-day administrative operations at the grassroots level. Finally, the ministry demanded systematic integration across the entire fiscal pipeline. It called for comprehensive horizontal and vertical coordination to establish an administrative apparatus that covers all funding stages and policy tools. Meeting participants were urged to build on pilot program findings by combining top-down policy design with local exploratory practices, and by addressing immediate economic challenges while laying the groundwork for long-term fiscal stability.