China 2025 Budget Revenue Dips 1.7%, Spending Up 1% in Fiscal Coordination Drive

Fiscal policy is the foundation and a key pillar of national governance; a sound fiscal and tax system provides institutional safeguards for optimizing resource allocation, maintaining market unity, promoting social equity, and ensuring long-term national stability. The 15th Five-Year Plan outline calls for strengthening coordination of fiscal resources and budgets, increasing the integration of government fund budgets, state capital operation budgets, and general public budgets, and bringing all revenue derived from administrative authority, government credit, and state-owned resources and assets under government budget management. On the new journey of building a modern socialist country, intensifying fiscal resource and budget coordination to strengthen the "national account book" is a key move to improve the efficiency of fiscal fund use and drive high-quality development, and a vital link in modernizing China's governance system and governance capacity.

China's economic and social development now faces fresh strategic opportunities alongside risks and challenges, placing higher demands on the precision and effectiveness of fiscal resource allocation. In 2025, national general public budget revenue stood at RMB 21.6045 trillion, down 1.7% from 2024, while expenditure reached RMB 28.7395 trillion, up 1%, leaving a revenue-expenditure gap of RMB 7.135 trillion. Tight fiscal balance has become the norm in budget management. Against this backdrop, optimizing the expenditure structure and improving fund efficiency have become priority tasks. Stronger coordination of fiscal resources and budgets helps avoid fragmentation and duplication in fund deployment, ensuring public funds are directed precisely to critical links in national development.

The 15th Five-Year Plan outline places building a modern industrial system and accelerating high-level scientific and technological self-reliance in a prominent position. Budget arrangements reflect strategic orientation, leveraging the guiding role of fiscal funds to support the development of advanced manufacturing clusters, nurture emerging and future industries, and drive industrial transformation toward intelligent, green, and integrated development. Investment in basic research, original innovation, and breakthroughs in key core technologies will be continuously strengthened, with improved incentive and safeguard mechanisms. Building a strong domestic market is strategic support for shaping a new development pattern and promoting high-quality development. Fiscal resource and budget coordination will actively leverage fiscal's role in boosting consumption and expanding investment, optimize the expenditure structure, reasonably raise the share of public service spending in total fiscal expenditure, enhance residents' consumption capacity and willingness, support consumption stimulus initiatives, cultivate new consumption growth points, tilt budgets toward key areas such as the "two major" and "two new" initiatives, and emphasize combining investment in physical assets with investment in people to promote human capital accumulation.

The 15th Five-Year Plan outline sets out a series of important arrangements for strengthening livelihood security. Fiscal resources will be tilted further toward employment, education, healthcare, elderly care, housing, and other areas of greatest public concern, supporting the implementation of income growth plans for urban and rural residents. With the international environment complex and severe and uncertain, unpredictable factors in China's development on the rise, budget arrangements firmly uphold bottom-line thinking and enhance risk awareness, prioritizing investment in food security, energy and resource security, and industrial and supply chain security. Support will be strengthened for exploration, development, and reserves of strategic mineral resources, necessary fiscal space will be reserved, and risk prevention and resolution capacity in areas such as local government debt and the financial system will be enhanced.

To ensure fiscal support for the strategic tasks of the 15th Five-Year Plan period, further reform potential must be unleashed and budget management system reform deepened. Specific measures include: strengthening comprehensive-caliber budget management and coordination among the four budget categories, increasing transfers from government fund budgets and state capital operation budgets into general public budgets for coordinated use, continuing to transfer state capital to enrich social security funds, improving central-local fiscal relations, appropriately strengthening central government affairs authority and raising the central share of fiscal expenditure, and increasing local autonomous fiscal capacity by improving the local tax system and standardizing transfer payment arrangements. Expenditure coordination will be strengthened through full implementation of budget performance management, integrating performance concepts and methods throughout budget preparation, execution, and supervision, vigorously promoting zero-based budgeting, and cutting non-urgent, non-rigid, and ineffective or low-efficiency spending. Cross-year budget balance will be pursued through stronger medium-term fiscal planning, greater counter-cyclical and cross-cyclical adjustment, and a more proactive fiscal policy, with cost estimates and fiscal affordability assessments for major projects, reasonable determination of government investment scale, and a dynamic balance between supporting development and preventing risks. Stock fiscal funds will be revitalized through long-term mechanisms, recovering surplus funds and carryover funds unused for two consecutive years for coordinated redeployment as required, intensifying cleanup of stock funds in fiscal accounts and real fund accounts of budget units to prevent fund idling and stagnation, while leveraging big data, artificial intelligence, and other technologies to improve the accuracy of fiscal revenue and expenditure forecasts, the scientific rigor of policy simulation, and the penetration of fund supervision, thereby enhancing the quality and efficiency of budget management.