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E-mail China.org.cn, February 17, 2025
Speakers:
Mr. Liao Min, vice minister of finance
Mr. Lin Zechang, director general of the Comprehensive Department of the Ministry of Finance (MOF)
Mr. Wang Jianfan, director general of the Budget Department of the MOF
Chairperson:
Ms. Shou Xiaoli, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
Jan. 10, 2025
Shou Xiaoli:
Ladies and gentlemen, good afternoon. Welcome to this press conference held by the State Council Information Office (SCIO), as part of the series "High-Quality Development Achievements of China's Economy." Today, we have invited Mr. Liao Min, vice minister of finance, to brief you on relevant developments and answer your questions. Also attending today's press conference are Mr. Lin Zechang, director general of the Comprehensive Department of the Ministry of Finance (MOF); and Mr. Wang Jianfan, director general of the Budget Department of the MOF.
Now, I'll give the floor to Mr. Liao for his brief introduction.
Liao Min:
Friends from the media, ladies and gentlemen, good afternoon. Thank you for attending today's press conference. And thank you all for your long-term interest in and support for our fiscal work. I would like to take this opportunity to brief you on the phased achievements of fiscal operations and policies in 2024, and the overall considerations for fiscal work in 2025.
In 2024, the finance departments, following the decisions and deployments of the Central Committee of the Communist Party of China (CPC) and the State Council, intensified existing and incremental policies to promote economic recovery and social stability.
First, the overall fiscal operation was stable and the budget was well implemented. September saw the implementation of a package of incremental policies and the stabilization of the macroeconomy. The growth rate of fiscal revenue turned positive for the month, improving month on month in October and November, while the data for December and the whole year is currently being compiled. In terms of expenditure, the finance departments strengthened resource coordination and maintained expenditure intensity. Key areas of expenditure have been well supported. Overall, a balance between revenue and expenditure can be achieved for the year.
Second, targeted policies were implemented, supporting the stable and healthy development of the economy and society. To promote consumption, in addition to implementing existing policies to support the building of commerce at the county level and other measures to expand domestic demand, we allocated 150 billion yuan ($20.62 billion) of ultra-long special treasury bonds in the second half of 2024 to support the trade-in of consumer goods. In particular, we increased subsidies for the scrapping and renewal of automobiles and trade-in of home appliances to ensure the discounts reach consumers directly. This is another good attempt to use large-scale central government funds for public consumption. In terms of expanding investment, three aspects need to be mentioned regarding bonds alone. Firstly, we issued a total of 4 trillion yuan of local government special bonds, including 3.9 trillion yuan newly issued in 2024 and 100 billion yuan carried over from 2023, with the scope of investment and project capital expanded. Secondly, we issued 1 trillion yuan of ultra-long special treasury bonds, of which 700 billion yuan was earmarked to support projects for implementing major national strategies and building security capacity in key areas. Thirdly, for the additional treasury bonds issued in 2023, most of the funds were used in 2024 to support post-disaster recovery and reconstruction, and to enhance disaster prevention and mitigation capabilities. In terms of ensuring people's livelihoods, we stepped up efforts to support low- and middle-income groups and special groups. For example, we raised the minimum monthly standards of basic pensions for urban and rural residents. The national scholarship and grant policies for college students were further improved and expanded, and living subsidies were also provided to people in difficulties. In terms of fostering new growth drivers, we vigorously supported technological innovation, promoted high-quality development of the manufacturing and modern service industries, accelerated the development of new quality productive forces, and facilitated industrial transformation and upgrading as well as the smooth transition between old and new growth drivers.
Third, we provided greater support for local governments to alleviate debt repayment pressure and enhance growth momentum. To support local debt risk resolution, we formulated and implemented the largest debt resolution package in recent years, with funds of 12 trillion yuan in total. Here is the latest update. The 2-trillion-yuan replacement quota for 2024 was fully issued on Dec. 18. The issuance of the 2-trillion-yuan replacement bonds for 2025 has already begun. This replacement policy has achieved three significant results. Firstly, local liquidity pressure was greatly alleviated during this period. The replacement policy helped to significantly reduce debt interest expenses, providing more room for local governments to support domestic demand. Secondly, debt transparency greatly increased. We officially announced for the first time that the hidden debt balance was 14.3 trillion yuan. The previous dual-track management of statutory debt and hidden debt has been gradually transitioned to the standardized and transparent management of all debts. The domestic and international communities, including major rating agencies and international organizations, have responded positively to these efforts. Thirdly, coordinated efforts were greatly enhanced to prevent risks while promoting development. With the systematic and holistic advancement of debt resolution efforts, local financial chains have been increasingly unimpeded, and development momentum has continuously strengthened. There has been a shift from the previous focus on risk prevention to a dual emphasis on risk prevention and development. Many areas have reported that with this timely policy, they have been less burdened and more motivated.
Regarding fiscal policies for 2024, I would also like to add that we have rolled out a package of incremental fiscal policies in order to implement the guiding principles of the meeting of the Political Bureau of the CPC Central Committee on Sept. 26. These policies mainly cover the following four aspects. First, increasing support for local governments to defuse debt risks. Second, issuing special treasury bonds to support major state-owned commercial banks in replenishing core tier-1 capital. Third, stepping up efforts to stabilize the property market and reverse its downturn. Fourth, increasing support and protection for key groups. At present, most of these policies have already been implemented, and there are two specific policy measures that are being actively advanced. One is the policy of using special bonds to support the acquisition of existing commercial housing for use as government-subsidized housing. We are working with relevant authorities to conduct research and refine measures. The other is the policy of issuing special treasury bonds to support major state-owned commercial banks in replenishing core tier-1 capital, enhancing their ability to serve the real economy. Currently, these banks are calculating and refining their plans to replenish capital, and we will expedite the implementation.
In 2025, the finance departments will implement a more proactive fiscal policy in accordance with the plans of the Central Economic Work Conference, continue to exert efforts and provide stronger support to effectively utilize the policies. This is an area in which many people are very interested. I can tell you that a more proactive fiscal policy can be expected in the future, which will mainly be reflected in three aspects — intensity, efficiency and seizing opportunities.
In terms of intensity, we will fully tap the potential of fiscal policy space, and strengthen counter-cyclical adjustments. We will raise the deficit-to-GDP ratio and increase the intensity of fiscal spending. We will increase transfer payments to local governments and enhance their fiscal capacity to ensure that basic living needs are met, salaries are paid and governments function smoothly. We will allocate a larger scale of government bonds, including ultra-long special treasury bonds and local government special bonds. In short, an intensified fiscal policy will be implemented to stabilize the economy.
As for the specific amount, which is of great interest to everyone, this can only be published after going through statutory procedures. Everybody can rest assured that a clear-cut fiscal policy in 2025 aimed at intensifying countercyclical regulation will be highly proactive. At the same time, the policy also takes medium- and long-term fiscal sustainability into consideration.
In terms of efficiency, we will emphasize optimization of the fiscal expenditure structure, placing greater emphasis on improving people's livelihoods, stimulating consumption and sustaining its momentum. We will provide greater support for stabilizing employment and boosting consumption by promoting the growth of residents' income, strengthening the social security system, developing new consumption sectors and improving the consumption environment. We will focus on accelerating the development of new quality productive forces, and increase support for fields such as education and talent, scientific and technological breakthroughs, rural revitalization, and green and low-carbon development. At the same time, we will steadily make the fiscal management more scientific, ensuring that every cent is used where it is needed most.
In terms of seizing opportunities, we will take measures early on, enhancing the forward-looking and targeted nature of the policies. We will accelerate spending and quickly convert it into actual expenditures, drive greater social investment and maximize the effect of fiscal policy. In this regard, we have fully considered the timeliness of counter-cyclical adjustment efforts.
In addition, we will deepen the reform of the fiscal and tax systems, boost efforts to prevent and defuse debt risks in key areas, and ensure steady operations and sustainable development of fiscal policy.
Finally, I would like to emphasize that in the face of new situations and problems in both internal and external environments, the fiscal policy has ample room for maneuver and tools at its disposal. We will closely follow developments both at home and abroad, conduct scientific planning and dynamic adjustments as appropriate, and implement policy tools sequentially as options for later use to provide strong support for economic and social development.
That's all for my introduction. My colleagues and I are now ready to answer your questions. Thank you.
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