Fiscal support for tech breakthroughs a focus for Beijing this year, minister says

Finance Minister Lan Foan has emphasised that fiscal efforts to support China’s technological advancement are a government priority, as many analysts predict that Beijing will raise this year’s fiscal deficit ratio to 4 per cent to bolster economic growth.

In an article in the Communist Party mouthpiece People’s Daily on Friday, Lan pledged that his ministry would “focus on enhancing technological innovation capabilities, increase central government funding for science and technology, and fully support breakthroughs in critical core technologies” this year.

“[We will] support high-quality development initiatives for key manufacturing industry chains, step up support for advanced technological transformation in the manufacturing sector, and further implement incentive policies for specialised and innovative small and medium-sized enterprises,” Lan wrote.

He also pledged to expand fiscal spending this year, with a higher deficit ratio and increased bond issuance, as well as a more targeted spending with a focus on improving people’s livelihoods and boosting consumption.

The need for stronger fiscal support and fresh growth drivers has become more urgent for the world’s second-largest economy this year, as a struggling real estate sector, external uncertainties during Donald Trump’s second term as US president and tech competition with the United States all threaten to complicate the landscape.

Specific figures on the deficit ratio and scale of bond issuance are expected to be announced during the annual “two sessions” meetings of the National People’s Congress and the Chinese People’s Political Consultative Conference next month.