China has ample fiscal space to bolster growth this year

BEIJING (Reuters) - China has ample fiscal policy space and tools to support economic growth this year and it will step up spending to spur investment, Vice Finance Minister Liao Min said on Friday.

More proactive fiscal policy can be expected in 2025, in terms of its strength, efficiency and timing, Liao said at a press conference.

"Facing new situations and problems in both internal and external environments, we have sufficient policy space and tools," Liao said.

The authorities will closely monitor the international and domestic situation and adjust policies to provide strong support for economic and social development.

In December, China's top leaders pledged to increase the budget deficit, issue more debt and loosen monetary policy to maintain a stable economic growth rate, according to a summary of the Central Economic Work Conference.

Reuters has reported that Beijing would target a budget deficit of 4% of gross domestic product this year, while maintaining an economic growth target of around 5%.

In 2024, local governments issued a total of 4 trillion yuan ($545.5 billion) in special bonds, including 3.9 trillion yuan under the annual quota and 100 billion yuan carried over from 2023, Liao said.

In addition, local governments issued 2 trillion yuan in special bonds to swap for hidden local debt by Dec. 18, he added.

($1 = 7.3326 Chinese yuan)

(Reporting by Beijing newsroom; Editing by Jacqueline Wong)