Chen Wenjun:

Thank you, Mr. Liu. Now the floor is open for questions. Please identify the news outlet your work for before raising questions.

CCTV: 

At the Central Economic Work Conference, it was noted that the proactive fiscal policy would be implemented in a more effective, targeted, and sustainable way. Therefore, would you like to elaborate on this, and explain how fiscal policy will play a role at an earlier stage? Thanks. 

Liu Kun:

Thank you for your questions. The proactive fiscal policy will be implemented in a more effective, targeted, and sustainable way, which is the major decision made by the Central Committee of the CPC and the State Council after assessing the domestic and international situations. It aligns with the new development philosophy and the general principle of prioritizing stability and pursuing progress while ensuring stability.

To implement the policy more effectively, we need to plan fiscal resources as a whole and improve budget compilation, review, expenditure, and performance-based budget management. In addition, we will work to see the evaluation results are linked to budget arrangement, strengthen the coordination with monetary policy, and ensure macro policies are stable and effective.

To implement the policy in a more targeted way, we need to focus on the high-quality development of manufacturing, easing difficulties for micro-, small- and medium-sized enterprises, scientific and technological innovations, and ramp up efforts to cut taxes and fees. We will also further improve the composition of fiscal spending and truly live on a tight budget, while at the same time working harder to provide funds for ensuring people's basic living needs, major areas, local governments, and especially the grassroots level. 

To implement the policy more sustainably, we need to arrange budget allocation based on what is necessary and possible. We must ensure and enhance public well-being in development instead of aiming too high and making the goals tantalizingly out of reach. We will keep the deficit-to-GDP ratio at safe levels and keep the debt under control scientifically to effectively prevent and defuse risks. 

You asked me how fiscal policy can play its role at an earlier stage. In fact, it means that we need to make the best use of our policies and plan such policies in advance. The sooner the policies are rolled out, the better the policies take effect. If you pay heed to financial news, you may notice that there have been several policies introduced on cutting tax and fees from the fourth quarter of last year to this January. And we will carry out work in the following aspects:

First, we will ramp up efforts to cut taxes and fees. Last year, we cut 1.1 trillion yuan of taxes and fees. Based on that, we will take more extensive measures to cut taxes and fees this year, to help market entities gain a stronger sense of accomplishment. 

Second, we will maintain an appropriate spending intensity. We will focus on achieving major scientific and technological breakthroughs, ecological and environmental protection, ensuring basic living needs, major regional strategies, modern agriculture, and major projects outlined in the 14th Five-Year Plan. We will work to see more targeted budgetary investment and avoid the money being spread too thin. 

Third, we will appropriately arrange special local government bonds. At the end of last year, we allocated 1.46 trillion yuan in advance from the country's 2022 quota for special local government bonds. In January, local governments issued 484.4 billion yuan in special bonds, accounting for a third of the advance quota. The money from the special bonds was used in infrastructure for transportation, municipal facilities and industrial parks, construction projects for affordable housing, and other key areas. In fact, some of the quota at the end of last year were saved for this year's use, so you may see that many new projects at local levels have already broken ground, and many of those projects have accessed funds from the special bonds.

Fourth, we will increase the scale of transfer payments from central to local governments. This year, we will arrange a considerable increase in the scale of transfer payments from central to local governments, especially the general transfer payments, which will continue to be weighted toward poor and less-developed areas and support grassroots governments in their efforts to ensure payment of salaries, normal operations, and the basic wellbeing of the people.

Fifth, Party and government institutions should tighten their belts. The central government will lead by example in living on a tight budget and cut non-essential and non-obligatory expenditures. Governments at local levels should also tighten their belts and advocate thrifty and frugal working. 

Sixth, we will tighten up financial discipline. We will work harder to improve financial orders at local levels and ensure that the financial discipline becomes the "red line" that cannot be crossed.