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E-mail China.org.cn, February 17, 2025
Nanfang Plus:
The Central Economic Work Conference proposed implementing "more proactive fiscal policies." Could you please outline the fiscal policy arrangements for 2025? Additionally, what flexibility is there to enhance counter-cyclical adjustments in these fiscal policies? Thank you.
Liao Min:
Thank you for the question. The Central Economic Work Conference clearly stated that in 2025, more proactive fiscal policies will be implemented with ongoing and enhanced efforts. There's significant interest in how this year's fiscal policies will be more "more proactive." I've just given a preliminary introduction, so now I'll explain the meaning of "more proactive" by discussing four different aspects.
First, we'll increase the deficit ratio. To meet the needs of counter-cyclical macroeconomic regulation, we will increase the fiscal deficit ratio in 2025. Moreover, as our GDP continues to grow, the scale of the deficit will increase significantly. Total fiscal expenditure will be further expanded, and counter-cyclical adjustments will be intensified to provide strong support for the ongoing recovery and improvement of the economy.
Second, we'll expand the scale of debt. We'll issue larger-scale government bonds to provide greater support for stabilizing growth and adjusting the economic structure. We'll expand the scale of ultra-long-term special government bonds to provide stronger support for the "two major" projects concerning the implementation of major national strategies and the build-up of security capacity in key areas. We'll also use the special bonds to intensify and expand the implementation of the "two new" policies that encourage large-scale equipment upgrades and consumer goods trade-ins. We'll increase the quota for new local government special bonds and expand the areas of investment and the scope for their use as project capital. This will drive effective investment and support strengthening infrastructure, addressing weaknesses, and promoting development. In addition, we'll issue special government bonds to help major state-owned banks replenish their core tier-one capital. This will enhance their ability to provide credit to the real economy and support the sustainable expansion of effective demand and economic restructuring.
Third, we'll ensure key expenditures. We'll vigorously optimize the structure of fiscal expenditure, strengthen support for key areas, and place greater emphasis on improving people's well-being, promoting consumption, and enhancing future potential. In terms of improving people's livelihoods, we'll appropriately increase the basic pension for retirees, raise the basic pension for urban and rural residents, and enhance financial subsidy standards for urban and rural residents' medical insurance to boost residents' incomes. In terms of boosting consumption, we'll fully utilize fiscal and tax tools to support special initiatives aimed at stimulating consumption. We'll ramp up our efforts on trade-ins for consumer goods, innovate diverse consumption scenarios, and make consumption more enjoyable and convenient. To enhance future potential, we'll support and accelerate the development of new quality productive forces. We'll strengthen support for key areas such as education and technology, rural vitalization, green and low-carbon initiatives, and major regional strategies to promote steady and long-term economic growth.
Fourth, we'll improve capital efficiency. The allocation and use of fiscal funds will focus more on goal- and performance-oriented strategies. We'll accelerate the progress of fund allocation and disbursement to effectively manage and utilize valuable fiscal resources, achieving greater benefits with the same amount of money. We'll also continue to ensure that Party and government agencies promote frugality, oppose extravagance and waste, prohibit vanity projects, and allocate more funds to key areas and those in greatest need. At the same time, we'll continue to optimize new resources while revitalizing existing ones. We'll effectively utilize incremental funds while actively working to enhance existing assets, thereby improving the allocation efficiency of fiscal resources. In 2025, we'll strengthen coordination between fiscal and monetary policies, focusing on enhancing their combined and multiplier effects. By utilizing public funds, we aim to stimulate more credit and non-public capital investment, restore market confidence, and play a positive role in expanding domestic demand and supporting stable, healthy economic development.
Looking ahead, the MOF will further refine and improve its fiscal policies, implement them proactively, and leverage their effectiveness as soon as possible.
That's all I have to share. Thank you.
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