China to speed up establishment of modern fiscal macroeconomic regulation mechanism: official

China will accelerate the establishment and improvement of a modern fiscal macroeconomic regulation mechanism during the 15th Five-Year Plan period (2026–2030) as part of its broader efforts to stabilize the economy and support high‑quality development, a senior finance official said on Friday.

Vice Minister of Finance Liao Min told a press conference held by the State Council Information Office in Beijing that the ministry will build a modern fiscal macro‑regulation system featuring targeted policies, diverse tools, clear guidance, and strong coordination.

"During the 15th Five‑Year Plan period, the Ministry of Finance will, in accordance with the relevant arrangements of the Party Central Committee and the State Council, scale up counter-cyclical fiscal adjustments with greater focus on enhancing the effectiveness and precision of fiscal macroeconomic regulation. This will lay a solid foundation for stabilizing the overall macroeconomic landscape, promoting economic structural adjustment, and ensuring sustained and sound high-quality economic and social development. In essence, the goal is to accelerate the establishment and improvement of a modern fiscal macroeconomic regulation mechanism that features precise policies, diverse tools, effective guidance, and efficient coordination," he said.

The vice minister also elaborated on the key principles guiding the ministry's fiscal policy over the next five years.

"First, we will adhere to the general principle of pursuing progress while ensuring stability. On one hand, we will maintain policy continuity and stability. On the other, we will prepare and roll out incremental measures in a timely manner to maximize the combined effect of existing and new policies. Second, we will strike a balance between aggregate and structural approaches. We will put greater emphasis on investing in people and raise the share of public service spending in total fiscal expenditure," said Liao.

In addition, the ministry will also focus on coordinating both the supply and demand sides, and on the integrated coordination of policy tools. It will target the bottlenecks and difficulties that constrain the smooth flow of the economic cycle, promote the normalization and long-term effectiveness of fiscal-financial coordination, and leverage fiscal funds to guide financial resources, so as to better unleash consumption potential and investment vitality, he said.

"Alongside fiscal macro‑regulation, we will continue to drive progress through reform, enhance efficiency through better management, and safeguard security by mitigating risks. We will improve the allocation of fiscal resources and the effectiveness of public spending, so as to better support growth and economic transformation, and achieve a virtuous cycle of high‑quality development and fiscal sustainability during the 15th Five‑Year Plan period," said Liao.

China to speed up establishment of modern fiscal macroeconomic regulation mechanism: official

U.S. Treasury Secretary Scott Bessent said Thursday that the government's long-dated bond buyback could be more than the recently announced 4 billion U.S. dollars, sparking concerns over rising inflation and mounting pressures on the Federal Reserve.

The U.S. Treasury announced Wednesday that it would at least double the size of its buyback program for 10- to 30-year Treasury bonds, aiming to provide more liquidity support to the long end of the market and curb the unsettling surge of treasury yields.

Bessent revealed in an interview on Thursday that the size of the buyback could be more than 4 billion U.S. dollars per issue, but didn't provide a specific number, saying the figure will depend on market conditions.

U.S. Treasury yields dropped following Bessent's statement. However, for the whole day, the yield on the benchmark 10-year Treasury note rose 4 basis points to 4.69 percent, while the 30-year bond yield increased by 4 basis points to 5.24 percent.

Speaking of the national debt, which has more than doubled in a decade to surpass the 40-trillion-U.S.-dollar mark, Bessent downplayed the milestone by emphasizing long-term economic expansion.

"There's nothing magic about the 40-trillion number," he said, asserting the U.S. will grow its way out of this.

Market analysts have warned that the intervention risk fueling inflation and complicating the Fed's monetary policy work.

They predict the Treasury will fund the buyback program by issuing short-term debt, an operation of replacing issuance of longer-term debt with shorter-term bills to curb long-term bond yields.

When the Treasury relies more on short-term debt, it becomes more sensitive to changes in interest rates. Once the Fed raises interest rates, the government's interest payments will increase rapidly, further driving up the total size of the national debt.

Therefore, analysts believe the buyback program is not a good solution to market problems, as structural debt pressures have already been out of the control of the Treasury and the government.

Investors are also skeptical that the Treasury's intervention can provide a lasting market relief. If the measure proves ineffective, it could further undermine the credibility the dollar and the Treasury.

US bond buyback expansion could fuel inflation, complicate Fed’s monetary policy work: analysts