China’s finance minister has pledged to roll out incremental and targeted fiscal policies to help achieve leadership’s full-year growth target for the country, following a freshly announced package of supportive measures. However, analysts expect Beijing to stop short of a major stimulus, providing only “just enough” support to meet the target.

Lan Foan made the pledge in an article published on Thursday in the Communist Party’s leading theoretical journal, Qiushi, calling for the broadened coverage of an interest subsidy policy, the onboarding of more implementing agencies, and moderately raised funding limits to unlock consumption potential and catalyse private investment.

Furthermore, he vowed to accelerate the pace of fiscal spending “in a reasonable manner” and strengthen oversight and guidance for regions where spending progress has been slower than expected.

The article came two days after Beijing released a fresh package of measures to boost the real economy, including an interest-rate cut for policy banks and the introduction of the country’s first interest subsidy for first-time homebuyers.

While the package signals that Beijing is now willing to use the central fiscal budget to support housing demand, Robin Xing, chief China economist at Morgan Stanley, said in a report on Tuesday that it was a “modest package to defend the growth floor”, with its impact likely to be more about signalling than providing substantial support.

Meanwhile, a report led by Larry Hu, chief China economist at Macquarie, noted that Beijing would do “just enough” to achieve this year’s growth target, describing it as a pattern that Beijing has followed since 2024.

“We don’t expect major policy stimulus as long as exports remain strong,” the report said.

China set this year’s growth target at “4.5 to 5 per cent” – a slight shift from the “around 5 per cent” goal that had been the recent norm – as the economy has been grappling with numerous headwinds, including weak domestic demand, a prolonged downturn in the property market and rising external risks.

Meeting this year’s target could prove challenging after gross domestic product growth came in at 4.3 per cent in the second quarter – the weakest reading since the end of 2022.

According to Lan, as the year enters its final quarter, the coming months will be “critical” for authorities to operate effectively and ensure the annual growth target is achieved, securing a solid start to the nation’s five-year planning period covering 2026 to 2030.

“[We should] accelerate the implementation of existing measures, formulate more targeted policy support, and make greater efforts to improve the effectiveness of the more proactive fiscal policy, helping achieve this year’s economic and social development goals,” he said.

On the prolonged issue of financial pressure facing local governments across the country, Lan said China would advance tax reforms to strengthen local revenue sources and orderly transform local government financing vehicles – off-balance-sheet corporate debt structures facing severe pressure due to the enduring property slump. Lan also called on government departments to improve the efficiency of public spending and help local governments better utilise idle assets and resources. He stressed that party and government institutions should maintain spending discipline, cutting costs wherever possible and reducing administrative expenses.

Top authorities have also stepped up their commitment to further policy support. Earlier this week, Premier Li Qiang chaired a State Council executive meeting that called for a series of policies to strengthen support for the economy, including encouraging local governments, where conditions allow, to pilot measures to boost consumption.