China is preparing to implement a record-high budget deficit, reaching 4% of its Gross Domestic Product (GDP) in 2025, according to sources familiar with the matter. The move is part of the country’s strategy to stimulate its slowing economy amid mounting debt and weakened domestic consumption.
Beijing plans to increase government spending on infrastructure, technology, and social programs to support economic recovery. This will be accompanied by relaxed fiscal policies aimed at boosting growth while addressing the challenges of a property sector downturn and reduced global demand.
If enacted, this would mark the largest budget deficit China has seen in years, reflecting concerns over stagnant economic expansion and the government’s need to provide significant stimulus. Economists warn, however, that prolonged deficits could increase risks related to China’s already-high debt levels.
