China has sufficient fiscal policy tools and ample flexibility to effectively respond to potential domestic and external uncertainties, Minister of Finance Lan Fo'an said at a news conference on Thursday.

China has opted for a more proactive fiscal policy this year, aimed at achieving annual targets and strengthening the drivers of medium and long-term development, Lan said during the ongoing annual session of the National People's Congress, the country's top legislature.

China has set the deficit-to-GDP ratio at around 4 percent and the deficit scale at 5.66 trillion yuan ($781.6 billion) – a 1.6 trillion yuan increase from the previous year, Lan said, stressing that the highest deficit level in recent years will allow the country to deploy stronger countercyclical adjustments.

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The country will issue 1.3 trillion yuan in ultra-long-term special treasury bonds to support major national projects, as well as the large-scale renewal of equipment and the trade-in of consumer goods, Lan added.

The central government has also increased its transfer payments to localities by 8.4 percent year-on-year, reaching a total of 10.34 trillion yuan this year, Lan said.

Lan highlighted that this year's focus on increasing general-purpose funds will empower local governments to have greater autonomy and flexibility in managing their financial resources, Lan added.