Opinion

Strengthening fiscal and financial policy coordination

The synergistic linkage between fiscal and financial policies can achieve a multiplier effect, guiding more financial resources toward areas such as employment and entrepreneurship support, financing for small and medium-sized enterprises(SMEs), and consumption promotion. Government departments and financial institutions must improve collaboration mechanisms and work closely together. Continuous optimization and refinement of various measures are essential to enhance the quality and efficiency of policy implementation.

In supporting employment and entrepreneurship, government-backed financing guarantees serve as a crucial means to address financing difficulties and high costs for micro and small enterprises, as well as entities in agriculture, rural areas, and farmers' sectors, thereby promoting employment and entrepreneurship. The development of micro and small enterprises requires credit resources, but many face challenges in obtaining loans due to a lack of effective collateral or weak creditworthiness. Government-backed financing guarantees accommodate the financing needs of micro and small enterprises by leveraging functions such as credit enhancement, risk sharing, and intermediation, thereby improving financing accessibility.

In promoting consumption, since the implementation of the two interest subsidy policies for personal consumption loans and loans for service sector entities in the consumption field in September last year, the credit costs for residents and business entities have been effectively reduced, channeling more credit funds into the consumption sector in a targeted manner. These two policies involve close collaboration between fiscal and financial authorities. Based on a 1 percent interest subsidy ratio, every RMB 1 of fiscal subsidy funds is estimated to potentially drive RMB 100 of loan funds for household consumption or supply in the service sector, demonstrating a significant leverage effect. Coupled with trade-in policy for consumer goods, these measures have effectively contributed to market recovery.

Strengthening the coordination and linkage between fiscal and financial policies will be a key focus of this year's more proactive and impactful macroeconomic policies. This will provide more targeted financial support for high-quality economic development and offer robust guarantees for a strong start to the 15th Five-Year Plan.

Policy

1. The Ministry of Industry and Information Technology, China's top industry regulator, said it is drafting plans to deepen the implementation of its "AI plus manufacturing" initiative, as the world's largest manufacturing powerhouse aims to ensure the safe and reliable supply of key core technologies in artificial intelligence by 2027, with industrial scale and enabling capabilities maintaining a leading position globally.

2. The Ministry of Civil Affairs and seven other central departments recently jointly issued document on cultivating business entities for elderly care services to fuel the growth of greying economy, outlining 14 specific initiatives focused on brand building, supply-demand platform development, and improving the business environment.

3. China will advance the opening-up of its services sector in nine additional pilot cities, according to a statement released by the Ministry of Commerce on Jan 9. The nine cities -- Dalian, Ningbo, Xiamen, Qingdao, Shenzhen, Hefei, Fuzhou, Xi'an and Suzhou -- will be tasked with implementing 159 pilot measures, targeting key areas of the services sector such as telecommunication, healthcare and financial services.

Data

1. China's postal industry processed 216.5 billion delivery items in 2025, according to data released by the State Post Bureau. It facilitated over RMB 14 trillion in online retail sales of physical goods throughout the year.

2. By the end of 2025, the average examination period for invention patents in China was reduced to 15 months from 20 months at the end of 2020, and the average review period for trademark registration has stabilized at four months, both ranking among the fastest worldwide.

3. Scientific and application experiment projects on the China Space Station progressed smoothly in 2025, with facilities covering life sciences, microgravity physics, space technology and applications, according to the Technology and Engineering Center for Space Utilization of the Chinese Academy of Sciences. 31 new in-orbit science and application projects were carried out by the space application system during the year.

4. China's foreign exchange reserves totaled USD 3.3579 trillion at the end of December 2025, marking an increase of USD 11.5 billion, or 0.34 percent, from the end of November, data from the State Administration of Foreign Exchange showed.

5. China's futures market reported double-digit year on year growth in 2025, according to the China Futures Association. The trading volume of the market reached about 9.07 billion lots in 2025, up 17.4 percent year on year, with the total trading turnover rose 23.74 percent year on year to RMB 766.25 trillion.

6. By the end of 2025, the regular installed hydropower capacity of pumped-storage hydropower stations in China exceeded 66 GW, ranking first in the world for ten consecutive years. Over 80 percent of the pumped-storage hydropower stations have single-station capacities of 1 GW or more, the National Energy Administration said.

7. The Shanghai Cooperation Organization (Lianyungang) International Logistics Park continued to play its role as logistics transit hub in 2025, according to data released by the Nanjing Customs. Throughout the year, it handled a logistics volume of 84.36 million tons, a year-on-year increase of 13.52 percent, and a container throughput of 677,000 TEUs, up 4.48 percent year on year, both setting new historical records.

8. Data form the State Grid Corporation of China showed that inter-provincial electricity transaction volume within its operating area reached 1.67 trillion kWh in 2025, a year-on-year increase of 10 percent, setting a new historical record.

9. The world's first 20-megawatt offshore wind turbine was installed in the waters off Fujian province, according to its operator China Three Gorges Corp. It has redefined the technological frontier for renewable energy, signaling that the era of ultra-large-scale maritime power has arrived.

10. China will drive the zero-waste city initiative forward by implementing comprehensive solid waste management and resource utilization measures in more cities. According to the Ministry of Ecology and Environment, 60 percent of its cities will meet the requirement of zero-waste cities by 2027, with full coverage expected by 2035.

(Source: Economic Daily)