China's Finance Minister Lan Fo'an has pledged to slash wasteful spending and boost government efficiency, signaling a new era of fiscal restraint. Speaking at the National People's Congress, he emphasized that Beijing doesn't have unlimited funds and vowed to eliminate any expenditure without a return on investment.

This announcement follows a more modest fiscal stimulus package unveiled earlier this week, with the government's broad deficit as a percentage of GDP declining from last year's plan. The shift reflects mounting pressure on China's finances, as interest payments climb while revenue falls under deflationary pressures and a property market slump. Rapid government debt buildup in recent years has further squeezed fiscal leeway.

The government's belt-tightening stance comes as President Xi Jinping has repeatedly warned against inefficient investments in pursuit of reckless growth. On Thursday, officials set a 4.5%-5% growth target for the world's second-largest economy, lowering the goal for the first time since 2023. This fiscal retrenchment could temper expectations for additional stimulus measures later in the year.