How to understand the fiscal policy arrangements for 2026

On the morning of March 5, 2026, the Fourth Session of the 14th National People’s Congress opened, and Premier Li Qiang delivered the “Government Work Report” (hereinafter referred to as the “Report”). The report proposed to “continue implementing more proactive fiscal policies,” “maintain a substantial scale of fiscal expenditure, and continuously optimize the expenditure structure, with a greater focus on supporting consumption, investing in people, and ensuring people’s livelihoods,” “firmly safeguard the bottom line of ‘three guarantees’ at the grassroots level,” “promote fiscal and tax system reforms,” “standardize tax incentives and fiscal subsidies,” and “actively and orderly resolve local government debt risks,” among other measures.

Overall, the fiscal policy and fiscal and tax system reform plans for 2026 aim not only to promote consumption, expand investment, stabilize growth, ensure the operation of grassroots finances, resolve debt risks, and support the construction of a unified national market, but also to stimulate the enthusiasm of local governments and improve fiscal sustainability in the medium and long term.

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