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Speakers:

Mr. Wang Dongwei, vice minister of finance

Mr. Wang Jianfan, director general of the Budget Department of the Ministry of Finance (MOF)

Mr. Li Xianzhong, director general of the Department of Treasury of the MOF

Mr. Hou Junming, director general of the Department of Asset Management of the MOF

Chairperson:

Mr. Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

Feb. 1, 2024

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we have invited Mr. Wang Dongwei, vice minister of finance, to brief you on fiscal revenue and expenditure in 2023, and to take your questions. Also present today are Mr. Wang Jianfan, director general of the Budget Department of the Ministry of Finance (MOF); Mr. Li Xianzhong, director general of the Department of Treasury of the MOF; and Mr. Hou Junming, director general of the Department of Asset Management of the MOF.

Now, let's give the floor to Mr. Wang for his introduction.

Wang Dongwei:

Ladies and gentlemen, good morning. I'd like to express my gratitude for your long-term interest and support in the fiscal work. Today, I'm very glad to be here to brief you on fiscal revenue and expenditure in 2023.

The year 2023 marked the first year of the full implementation of the guiding principles of the 20th National Congress of the Communist Party of China (CPC), and a year of economic recovery and growth following three years of COVID-19 pandemic prevention and control. The MOF has adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and thoroughly implemented the guiding principles of the 20th CPC National Congress, the second plenary session of the 20th CPC Central Committee, and the Central Economic Work Conference. In line with the decisions and deployments of the CPC Central Committee and the State Council, the MOF has enhanced macro fiscal regulation, steadily executed positive fiscal policy, and promoted the recovery and high-quality development of the economy. In 2023, the fiscal and budgetary work had five features.

First, fiscal revenue maintained a rebound trend. Thanks to such factors as economic recovery and large-scale value-added tax (VAT) credit refunds lowering the base, fiscal revenue rebounded in 2023. Revenue in the national general public budget exceeded 21 trillion yuan, up by 6.4%. Specifically, the fiscal revenue in eastern, central, western and northeastern China increased by 6.7%, 6.9%, 10.7%, and 12%, respectively. The fiscal revenue of all 31 provinces in China registered positive growth. 

Second, fiscal expenditures continued to grow. At the beginning of 2023, the deficit-to-GDP ratio was projected to be 3%. To support post-disaster recovery and reconstruction and improve the disaster prevention, mitigation and relief capacities, a further 1 trillion yuan of government bonds were issued in the fourth quarter, all of which were allocated to local governments through transfer payments. Expenditures in the national general public budget reached 27.46 trillion yuan in 2023, up by 5.4%. Key areas were guaranteed effectively, with expenditures on social security and employment increasing by 8.9%, education by 4.5%, technology by 7.9%, agriculture, forestry and water by 6.5%, and urban and rural community development by 5.7%. 

Third, tax and fee reduction policies continued to be improved and optimized. At the beginning of 2023, some tax and fee policies were extended and optimized. In the second half of last year, a number of expiring tax and fee policies were extended and refined based on changes to the economic situation, further reducing the tax and fee burdens on business entities and providing targeted support to the high-quality development of the real economy, including the manufacturing industry. In 2023, newly implemented tax and fee reductions, tax refunds and postponements for fee payments nationwide exceeded 2.2 trillion yuan. 

Fourth, special-purpose bonds policy exerted higher effectiveness. In 2023, 3.8 trillion yuan of local government special-purpose bonds were allocated, prioritizing support for mature and ongoing projects. The focus remained on key areas, avoiding a scattered approach and expanding the investment scope of special-purpose bonds into 11 sectors. The range of utilization of special-purpose bonds as project capital was also broadened to cover 15 aspects. At the same time, efforts were intensified in the issuance and utilization of special-purpose bonds, effectively driving the construction of key projects with both immediate and long-term benefits in areas such as transportation, water resources and energy.

Fifth, the bottom line for risk prevention was further consolidated. For one thing, efforts were made to formulate a package of plans to address local government debts. Solid progress was made in defusing hidden debt risks of local governments as well as addressing existing risks and curbing new ones. For another, more transfer payments were made to local governments, with such payments in 2023 reaching 10.29 trillion yuan. The policy for rewards and subsidies to ensure basic funding for county-level governments was improved, channeling more funds toward regions with relatively weak financial resources and greater burden on ensuring basic living, salary payments and normal government functioning. Simultaneously, we guided provincial-level governments to channel more financial resources toward lower levels of government, with the aim of ensuring basic living, salary payments and normal government functioning at the primary level.

Since the beginning of this year, the basic trend of a solid rebound, improvements, and long-term growth in economic performance has not changed. Macroeconomic policies have continued to take effect, and steady progress has been made in pursuing high-quality development, laying a solid foundation for revenue growth. Fiscal revenue will continue to rebound. In terms of government expenditure, we will maintain its necessary intensity and a certain scale of transfer payments to local governments. The specific budget for revenue and expenditure in 2024 will be refined and perfected in accordance with the decisions and deployment of the CPC Central Committee and the State Council, and we will submit it to the National People's Congress for deliberation and ratification as per procedure.

Next, the MOF will continue to adhere to the principles of seeking progress while maintaining stability, promoting stability through progress, and establishing the new before abolishing the old. We will coordinate the strategy of expanding domestic demand and deepening supply-side structural reform, new urbanization and all-round rural revitalization, and high-quality development and high-level safety. We will intensify fiscal macro-regulation and effectively implement a proactive fiscal policy, consolidating and building on the momentum of recovery in economic performance.

That's all for my introduction on fiscal revenue and expenditure in 2023. My colleagues and I are ready to take questions. Thank you!