China's Fiscal Approach: Balancing Deficit with Economic Adjustments

China plans to maintain fiscal deficit and debt levels while addressing local government financial issues by 2026. The country will adjust its monetary policy and use tools like interest rate cuts to stabilize the economy, according to the annual Central Economic Work Conference report from Xinhua.

China will uphold its fiscal deficit and debt levels, aiming to tackle local government financial pressures by 2026, as per an official Xinhua report.

Strategies include enhancing monetary policies with counter-cyclical adjustments, utilizing tools such as cutting banks' reserve requirements and interest rates.

These steps were disclosed following the annual Central Economic Work Conference on December 10–11.