(Yicai) Feb. 10 -- China's fiscal expenditure structure shifted noticeably last year, with more funds channeled into people’s livelihood programs such as social security, employment and healthcare. Meanwhile, spending on infrastructure construction declined sharply for the first time since records began.

Government spending on social security and employment jumped 6.7 percent last year from the year before to CNY4.4 trillion (USD636.7 billion), according to data recently released by the Ministry of Finance. This growth rate was 1.1 percentage point higher than in 2024. Healthcare spending soared 5.7 percent to CNY2.1 trillion, reversing a 9.1 percent drop the year before.

By contrast, infrastructure-related spending weakened. Outlays on agriculture, forestry and water conservancy tumbled 13.2 percent to CNY2.3 trillion (USD332.7 billion), that on urban and rural community development slumped 5 percent to CNY2.1 trillion while that on transportation dipped 0.7 percent to CNY1.2 trillion. Combined, spending across the three categories was down 7.8 percent.

In comparison, total fiscal expenditure grew by just 1 percent last year from the previous year to CNY28.7 trillion (USD4.2 trillion).

Last year, fiscal funds were increasingly directed toward shoring up gaps in people's livelihood programs, while infrastructure-related spending declined, said Yuan Haixia, director of China Chengxin International Credit Rating’s research institute. Combined with local governments’ pullback as they worked to defuse debt risks, this led to a nationwide drop in infrastructure investment for the first time since detailed statistical data began to be recorded in 2004.

China's fixed asset investment excluding rural households tumbled 3.8 percent last year from the year before to CNY48.5 trillion (USD7 trillion), with infrastructure investment slumping 2.2 percent, according to data released by the National Bureau of Statistics.

For decades, China has maintained annual infrastructure investment growth of between 5 percent to 10 percent. Last year’s slowdown may signal that the traditional infrastructure-led growth model has reached a temporary ceiling, Xiao Guangrui, chief executive officer of data analytics firm Bridata, told Yicai.

Despite the sharp drop in traditional infrastructure investment, manufacturing investment and high-tech services remain resilient. This suggests that the investment mix is shifting, with funds flowing from traditional infrastructure into new growth drivers, Xiao said.

With 2026 marking the first year of China’s 15th Five-Year Plan, infrastructure investment growth is expected to rebound to around 8 percent, thanks to benefits from the rollout of new policy-oriented financial tools and as the government lays out the groundwork for economic growth and kicks off major projects, Yuan said.

Editors: Dou Shicong, Kim Taylor