Fiscal policy support for China’s economy has fallen short of official targets in recent years, and that trend is continuing in 2021. Government bond sales have declined relative to last year’s levels, and more bonds are being used for refinancing purposes, not new spending. Longer-term trends point to stabilizing or rising tax burdens, reducing the potential for future fiscal stimulus. Actual budgetary spending is likely to fall short of its target levels in 2021, continuing a trend from recent years, and limiting infrastructure investment growth.
