Recent fiscal data from the first half of the year shows China's fiscal revenue growing steadily while maintaining necessary spending levels, effectively supporting the implementation of major national strategies and enhancing public welfare. The Political Bureau of the Central Committee emphasized implementing a more proactive fiscal policy and a moderately loose monetary policy during its economic work deployment for the second half of the year, aiming to fully leverage existing policy measures and promptly introduce practical incremental policies to strengthen counter-cyclical adjustments.
Revenue is showing signs of recovery. In the first half of the year, China's general public budget revenue reached 12.1 trillion yuan, up 4.7% year-on-year, with cumulative growth rates rising month by month. Economic development serves as the foundation for fiscal revenue growth. The strong performance of fiscal revenue in the first half is largely attributed to the economy's resilience, maintaining a stable and improving development trend with new vitality and structural optimization. Additionally, factors such as rising prices, a vibrant stock market, and robust foreign trade growth have also supported fiscal revenue gains.
As a major component of general public budget revenue, tax revenue growth has continued to increase. In the first half, national tax revenue reached 9.79 trillion yuan, up 5.3% year-on-year, representing a 3.1 percentage point acceleration from the first quarter. Li Xuhong, Vice President and Professor at the Beijing National Accounting Institute, analyzed that domestic value-added tax grew by 6% and corporate income tax by 3.9%, reflecting a recovery in production, operations, and corporate profitability. The relatively rapid growth of personal income tax and import-related taxes indicates improving resident income, import trade, and domestic demand activity.
Revenue growth has been widespread across regions. In the first half, local general public budget revenue reached 6.88 trillion yuan, up 2.7% year-on-year, an increase of 0.6 percentage points from the first quarter. By region, eastern, central, western, and northeastern areas all saw revenue growth. Among 31 provinces, 28 reported revenue increases, three more than in the first quarter.
Effective expansion of investment and consumption. This year, China has continued to implement a more proactive fiscal policy, particularly focusing on the strategic priority of expanding domestic demand. The government has coordinated tools such as government bonds, fiscal interest subsidies, and special funds to continuously promote investment and consumption, driving economic momentum toward innovation and structural optimization. Special bonds are a key policy instrument for macroeconomic regulation. According to budget arrangements, this year's new local government special bonds total 4.4 trillion yuan. Various regions have implemented new management mechanisms for special bonds, strengthening their issuance and use management, with the policy effects of special bonds continuing to manifest. A number of major projects have commenced construction. In the first half, new special bond issuance reached 2.07 trillion yuan, achieving 47% of the issuance target, primarily directed toward key areas such as municipal and industrial park infrastructure, transportation infrastructure, urban renewal, and social programs, ensuring funding for major projects and key sectors.
The pilot program for "self-review and self-issuance" of special bonds has been steadily expanded, incorporating Hebei, Jiangxi, Hubei, and Chongqing into the pilot this year. These newly included pilot regions have seen improved project reserves and quality, with significantly faster issuance and use progress. By the end of June, pilot regions for "self-review and self-issuance" had issued 1.6 trillion yuan in new special bonds, accounting for 77% of the national total. A major highlight of this year's macroeconomic regulation is the innovative establishment of fiscal-financial coordination tools to boost domestic demand. The central government has specifically allocated 100 billion yuan, launching a comprehensive set of fiscal-financial policies to promote consumption and expand investment. The synergy between fiscal and financial policies has achieved a "1+1>2" effect. Statistics show that in the first half, new loans to small and micro enterprises, equipment renewal loans, loans to service industry operators, and personal consumption loans in related fields totaled over 17 trillion yuan, up 4.6% year-on-year.
Additionally, the scope and standards of consumer subsidies for trade-in programs have been adjusted and optimized, covering traditional home appliances like refrigerators and TVs as well as new digital products such as tablets and smartwatches. This year, consumers can enjoy significant "national subsidies" when purchasing various consumer goods. Statistics indicate that 125 billion yuan in related subsidy funds were allocated in the first half, driving sales of cars, home appliances, and digital products to approximately 1.1 trillion yuan. "By adhering to scientific fiscal management and targeted policy implementation, further optimizing expenditure structures, the fiscal policy's supporting role in stabilizing growth, expanding domestic demand, and improving people's livelihoods has become more evident," Li Xuhong said.
Leveraging the integrated effect of policies. The Political Bureau of the Central Committee has called for macroeconomic policies to exert force and enhance efficiency, accelerating the pace of fiscal spending and bond fund utilization to effectively advance the construction of major national projects and the renewal of equipment and consumer goods. Li Xuhong believes that in the second half of the year, the focus of a more proactive fiscal policy will be on accelerating policy implementation and improving fund efficiency, converting budget arrangements more quickly into effective demand and development outcomes. "In the second half, the key to speeding up expenditure progress lies at the local level. Looking at the structure of general public budget expenditure, personnel expenses follow a sequential schedule, leaving limited room for improvement in expenditure progress. There is some room to optimize public utility expenses, but spending units must strictly adhere to budget execution requirements, accelerating spending while ensuring compliance. The greatest potential for improvement lies in project-related expenditures, which require stronger efforts to push project implementation forward," said Yang Zhiyong, President and Researcher at the Chinese Academy of Fiscal Sciences.
Yang Zhiyong suggested that within the framework of accelerating the establishment of a government debt management mechanism suited to high-quality development, the design of special bond projects should be optimized, including their scale, investment direction, and maturity structure. By coordinating general bonds, special bonds, special treasury bonds, and ultra-long-term special treasury bonds, different bond types should form a cohesive fiscal policy, fully utilizing the valuable fiscal policy space to more effectively create synergy in macroeconomic governance. To address difficulties and challenges in economic operations, it is necessary to coordinate the use of existing and incremental policies, intensify efforts to expand domestic demand and optimize supply, thereby forming an integrated policy effect. "Promptly designing and introducing practical and effective incremental policies should focus more on revitalizing and utilizing existing funds, resources, and assets. By strengthening scientific fiscal management, coordinating the use of fiscal policy space, and optimizing the combination of policy tools, the policy effects can be more fully released," Yang Zhiyong said.
Comments