China pledges stronger fiscal support to boost domestic demand

China will strengthen counter-cyclical fiscal measures, introduce incremental policies as economic conditions warrant and expand support for domestic demand, the Ministry of Finance said on Friday.

The issuance and use of government bonds will be accelerated to speed up project construction, the ministry said in a report on fiscal policy implementation in the first half of this year.

In line with the report, support will continue for the implementation of major national strategies and security capacity building in key areas, as well as equipment upgrades and consumer goods trade-ins. Fiscal and financial policies will be better coordinated to encourage household spending and private investment.

More funding from ultra-long special treasury bonds, local government special-purpose bonds and central budget investment will go towards key areas including new quality productive forces and urbanization, prioritizing strategic projects that improve productivity, the report said.

The issuance of special treasury bonds has also been earmarked for injecting capital into eight central State-owned financial institutions, strengthening their ability to withstand risks and support the real economy, the ministry said.

Efforts will be made to accelerate the resolution of outstanding hidden local government debt, advance the reform of local government financing vehicles and help clear overdue payments to businesses, the ministry added.