Sheng Songcheng: How Fiscal and Monetary Policy Should Coordinate During the "15th Five-Year Plan" Period

WealthCoffee · 2026-03-19T00:23:27+00:00

Monetary policy and fiscal policy are the core tools of China's macroeconomic regulation, and their coordinated cooperation is an inevitable choice for achieving multiple objectives such as economic growth and employment stability. Under complex constraints, a single policy cannot effectively address various tasks, so it is necessary to coordinate and promote precise implementation of policies.

WealthCoffee

2026-03-19 00:23:27

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Monetary policy and fiscal policy are the two main tools for China’s macroeconomic regulation. Monetary policy involves the central bank adjusting the “quantity” and “price” of money to influence macroeconomic operations, with its effectiveness relying on the transmission through the real economy and financial system. Fiscal policy is directly implemented by the government through budget allocations, taxation, government debt, and transfer payments, covering both central and local levels. The “14th Five-Year Plan” period is an important stage for China to comprehensively build a modern socialist country. To achieve a good start, coordinated efforts and precise policies are needed to serve core goals such as expanding aggregate demand and optimizing economic structure.

Coordinated and synchronized fiscal and monetary policies are the inevitable choice for macroeconomic regulation

Compared with mature economies abroad, China’s macroeconomic regulation faces a complex pattern of “multiple goals and multiple constraints.” It must promote economic growth, stabilize employment, control prices, and maintain balance of international payments, while also achieving economic structural optimization, financial stability, and people’s livelihood protection. Essentially, it is a systematic project seeking optimal solutions under multiple constraints. Relying on a single policy to “fight alone” cannot cover all goals and may even weaken the effectiveness of macroeconomic regulation.

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