Recent fiscal revenue and expenditure data reveals that in the first half of the year, China's fiscal revenue grew steadily, maintaining necessary spending levels. This effectively supported the implementation of major national strategic tasks and enhanced public welfare. The Politburo meeting, when outlining economic work for the second half of the year, stressed the importance of implementing a more proactive fiscal policy and a moderately accommodative monetary policy. It called for maximizing the effectiveness of existing policies, promptly designing and introducing practical incremental policies, and increasing counter-cyclical adjustments.
Revenue is showing a recovery trend. In the first half of the year, national general public budget revenue reached 12.1 trillion yuan, a year-on-year increase of 4.7%, with the cumulative growth rate rising month by month. Economic development is the foundation and source of fiscal revenue growth. The strong performance of fiscal revenue in the first half is largely due to the economy's resilience under pressure, maintaining a generally stable, innovative, and high-quality development trend, demonstrating strong resilience and vitality. At the same time, factors such as rising prices, a vibrant stock market, and robust foreign trade growth also strongly supported fiscal revenue growth. As the main component of general public budget revenue, tax revenue growth has continued to accelerate. In the first half, national tax revenue reached 9.79 trillion yuan, a year-on-year increase of 5.3%, an acceleration of 3.1 percentage points compared to the first quarter. Li Xuhong, Vice President and Professor at the Beijing National Accounting Institute, analyzed that domestic VAT and corporate income tax grew by 6% and 3.9% respectively, reflecting a recovery in production, operations, and corporate profitability. The relatively fast growth of personal income tax and import-related taxes indicates improvements in residents' income, import trade, and domestic demand activity. Revenue growth was widespread across regions. In the first half of the year, local general public budget revenue reached 6.88 trillion yuan, a year-on-year increase of 2.7%, an acceleration of 0.6 percentage points compared to the first quarter. By region, revenue in the eastern, central, western, and northeastern areas all grew. Among the 31 provinces, 28 saw revenue growth, three more than in the first quarter.
Effectively expanding investment and consumption. This year, China continues to implement a more proactive fiscal policy, particularly adhering to the strategic focus of expanding domestic demand. It has coordinated the use of tools such as government bonds, fiscal interest subsidies, and special funds to persistently boost investment and consumption, helping to drive the economy toward innovation and structural optimization. Special bonds are a crucial policy tool for macroeconomic regulation. According to the budget plan, 4.4 trillion yuan in new local government special bonds will be issued this year. Various regions are implementing new management mechanisms for special bonds, strengthening their issuance and usage management. The policy effects of special bonds continue to be released, with a number of major projects starting construction. In the first half of the year, 2.07 trillion yuan in new special bonds were issued, achieving 47% of the planned issuance progress. These funds were primarily used in key areas such as municipal and industrial park infrastructure, transportation infrastructure, and urban renewal and social programs, effectively meeting the funding needs of major projects. The pilot program for "self-review and self-issuance" of special bonds is steadily expanding. This year, Hebei, Jiangxi, Hubei, and Chongqing were added to the pilot scope. In these newly included regions, project preparation has improved in quality and efficiency, and the pace of issuance and usage has noticeably accelerated. 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 policy tools to boost domestic demand. The central government has allocated 100 billion yuan to launch a package of policies coordinating fiscal and financial measures to promote consumption and expand investment. This fiscal-financial coordination creates a "1+1>2" policy effect. Statistics show that in the first half of the year, new loans in related areas – including loans to small and micro enterprises, equipment renewal loans, loans to service sector operators, and personal consumption loans – totaled over 17 trillion yuan, a year-on-year increase of 4.6%. Additionally, the scope and standards of subsidies for trading in old consumer goods for new ones were adjusted and optimized, expanding from traditional appliances like refrigerators and televisions to digital products like tablets and smartwatches. This year, consumers can enjoy substantial "national subsidies" when purchasing various consumer goods. Statistics show that 125 billion yuan in related subsidy funds were allocated in the first half of the year, driving approximately 1.1 trillion yuan in sales of automobiles, home appliances, and digital products. "By adhering to scientific fiscal management and precise policy implementation, and further optimizing the expenditure structure, fiscal policy has become a more significant support for stabilizing growth, expanding domestic demand, and improving people's livelihoods," Li Xuhong stated.
Leveraging integrated policy effects. The Politburo meeting proposed that macro policies should be intensively implemented to enhance effectiveness, accelerating the pace of fiscal expenditure and bond fund usage to vigorously advance the construction of "two major projects" and the "two new types" of work. 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, ensuring that budget plans are more quickly translated into effective demand and development outcomes. "In the second half of the year, speeding up expenditure progress will be a key focus at the local level. Looking at the structure of general public budget expenditure, personnel expenses proceed according to schedule, leaving little room for improving expenditure pace. There is some room for optimizing office expenses, and spending units must strictly adhere to budget execution requirements, accelerating expenditure while ensuring compliance. The greater potential for improvement lies in project-related expenditures, where efforts must be more forceful in promoting project implementation," 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 suitable for high-quality development, the design of special bond projects should be optimized, including their scale, allocation, and maturity structure. Coordinating general bonds, special bonds, special treasury bonds, and ultra-long-term special treasury bonds is necessary to form a cohesive fiscal policy force, effectively utilizing the valuable fiscal policy space to create a more effective synergy in macroeconomic governance. To address the 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, and create integrated policy effects. "When promptly designing and introducing practical and effective incremental policies, more attention should be paid to the revitalization and utilization of 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 effects of these policies can be more fully released," Yang Zhiyong added.
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