Under the dual pressures of sustained global high interest rates and geoeconomic fragmentation, member countries of the ASEAN+3 (China, Japan, South Korea) framework are confronting multiple challenges, including tightening fiscal space and a significant reduction in macro risk buffers. How should the ASEAN and China, Japan, and South Korea region optimize fiscal measures to foster regional economic growth? At the ASEAN and China, Japan, and South Korea Regional Economic Outlook and Fiscal Policy Seminar held on July 2, numerous domestic and international experts offered suggestions on refining regional fiscal policy.

ASEAN and China, Japan, and South Korea Macroeconomic Research Office Senior Economist Huang Guohua noted that countries are generally facing the dilemma of reduced fiscal revenues and persistently rising rigid expenditures. Compounded by shocks from global oil price and trade policy fluctuations, regional growth is slowing and the wealth gap is widening, placing pressure on both sides of the fiscal balance sheet for ASEAN+3. He pointed out that a significant portion of fiscal funds is solidified for personnel salaries, social welfare, and debt service. "If the proportion of these expenditures is too high, the remaining fiscal resources available for other priority areas become very limited."

ASEAN and China, Japan, and South Korea Macroeconomic Research Office (AMRO) Fiscal Monitoring Group Head Seunghyun Hong also acknowledged that external shocks have evolved from a past "once-in-a-decade" occurrence to a "once every year or two" high-frequency new normal. The unpredictable impact of sudden shocks makes it significantly more difficult for conventional fiscal policies to respond effectively.

Bank of Japan Hong Kong Office Chief Representative Koike Kazunori, referencing the context of multiple supply-side shocks in recent years such as the pandemic, shipping lane blockades, and tariff increases, emphasized that such sudden disruptions exceed the scope of regular economic cycle fluctuations, making them difficult for standard policies to quickly counteract. Furthermore, ongoing instability in the Middle East is putting additional downward pressure on the currencies of Indonesia and the Philippines, adversely affecting their fiscal balances.

Enhancing Cross-Sector Coordination

Addressing the issue of fiscal sustainability, Lu Bingyang, Executive Director of the Institute of Public Finance and Taxation at Renmin University of China and Professor at the School of Finance, proposed that assessing fiscal sustainability cannot rely solely on a single metric like the debt ratio. It is also misguided to narrowly pursue fiscal health on paper while neglecting the developmental needs of the economy and society.

Data shows that during China's 14th Five-Year Plan period, cumulative new tax cuts, fee reductions, and tax rebates exceeded 10 trillion yuan, reducing burdens and injecting vitality for a vast number of market entities, effectively driving high-quality economic development. Lu Bingyang analyzed that unlike foreign tax policies, which often adjust frequently with political cycles, China's fiscal and tax policies exhibit long-term characteristics, maintaining policy consistency and stability over extended periods. "It should be said that China's fiscal policy possesses strong resolve." He also stated directly that as a core economy in the ASEAN+3 region, China's fiscal policy has a significant external spillover effect. "China stabilizing its own fiscal situation is crucial support for regional development."

Tu Yonghong, Deputy Director of the International Monetary Institute at Renmin University of China and Dean of the Yangtze River Economic Belt Research Institute, stated that against the backdrop of intertwined geopolitical, climate, and financial risks, relying solely on a single policy tool like fiscal or monetary policy is insufficient to effectively hedge risks. There is a need to coordinate the synergistic efforts of fiscal, monetary, industrial, and trade policies. She called for the establishment of a consistent policy framework within the ASEAN+3 region to achieve better macroeconomic policy management outcomes.

Using the development practice of the Yangtze River Economic Belt as an example, Tu Yonghong pointed out that fiscal policy leverages funds and tax incentives to mobilize social capital, promoting industrial upgrading and economic and trade cooperation with ASEAN. She reminded countries that assessing fiscal sustainability should not solely rely on revenue and expenditure indicators but should also consider the nation's current developmental needs. "There should be more fiscal expenditure to promote industrial upgrading, which is a crucial driver for future sustainable development," Tu Yonghong added.

Strengthening Fiscal Policy Resilience

Regarding corresponding measures to strengthen risk management, experts including Huang Guohua and Seunghyun Hong emphasized the importance of establishing clear and credible fiscal anchors. This would make fiscal measures more targeted, thereby safeguarding the bottom line of fiscal sustainability and avoiding short-term policy shifts and uncontrolled debt.

Huang Guohua urged countries to rely on legalized fiscal rules and medium-term fiscal frameworks to solidify fiscal discipline and stabilize market expectations. By optimizing the allocation of financial resources, improving expenditure efficiency, broadening tax revenues, and improving risk contingency plans, the foundation for the stable operation of regional public finances can be comprehensively strengthened.

Seunghyun Hong proposed that countries should formulate contingency plans for fiscal shocks and preemptively reserve policy tools. "Increasing investment in renewable energy and optimizing industrial structure can effectively reduce an economy's external risk exposure, fundamentally enhancing its resilience to shocks," he added. Furthermore, he suggested that countries engage in open and transparent public communication, popularize fiscal knowledge, and build social consensus.

Koike Kazunori believes that fiscal policy remains the first line of defense against crises. In his view, national macroeconomic policy frameworks must maintain sufficient flexibility to adjust fiscal measures nimbly according to economic conditions. He offered three recommendations: fiscal policy should maintain appropriate rationality; funds should be precisely targeted, avoiding universal subsidies; and cross-departmental coordination should be strengthened, formulating fiscal plans by combining professional expertise from multiple fields.