China will continue to pursue a "more proactive" fiscal policy this year with increased government spending and more supportive policy measures of greater intensity to sustain economic growth, Vice-Minister of Finance Liao Min said.

"For 2026, the fiscal deficit, total government debt and overall spending will be maintained at necessary levels, ensuring increased overall spending and stronger support for key areas," Liao said at a news conference on Tuesday.

Full consideration has been given to medium — and long-term fiscal sustainability and to building up development momentum, Liao added.

Experts said a more proactive fiscal policy, underpinned by a larger fiscal spending scale, will strongly boost economic growth and domestic demand, echoing the top economic priority for 2026 highlighted at the recent Central Economic Work Conference.

Highlighting fiscal-financial coordination, Liao said China will explore innovative policy tools to better leverage public funds and amplify the spillover effects of policy measures.

Earlier in the day, the Ministry of Finance rolled out a package of measures to spur private investment and consumption, including loan interest subsidies for micro, small and medium-sized enterprises and a special guarantee program for corporate lending, with Liao saying the measures "feature broad coverage, strong policy support and a diverse policy toolkit."

"The loan interest subsidy policy for micro, small and medium-sized enterprises is a new measure introduced to support the development of private MSMEs," Liao said, adding that the subsidy will be set at 1.5 percentage points of the loan amount per year, with a maximum subsidy period of two years.

The policy will target 14 key industrial chains and their upstream and downstream segments, covering sectors such as new energy vehicles, industrial robots, medical equipment and mobile communications, as well as producer services including technology, logistics, information and software, and agriculture-related industries, according to Liao.

Moreover, the special guarantee program, with a total scale of 500 billion yuan ($71.42 billion), is aimed at backing loans to micro, small and medium-sized private enterprises, supporting medium — and long-term financing needs for their business expansion, upgrading and operational improvements, Liao said.

Lou Feipeng, a researcher at the Postal Savings Bank of China, said the measures will help lower financing costs for consumption and investment, and guide credit toward key areas of domestic demand to support stable growth and domestic demand expansion.

Zhang Chenxu contributed to this story.