.

Read in Chinese

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!

Chen Wenjun:

Thank you, Mr. Wang. Now, the floor is open for questions. Please identify the news agency you represent before asking questions.

Reuters:

According to the Central Economic Work Conference, China will implement its 2024 fiscal policy by appropriately strengthening it to improve quality and effectiveness. I would like to ask, how does the MOF assess the trend of fiscal revenue and expenditure this year? How can fiscal policy effectively support the economic recovery? Thanks.

Wang Dongwei:

Thank you for your questions. As you mentioned, the Central Economic Work Conference set a clear goal for strengthening counter-cyclical and cross-cyclical adjustment of macro policies and implementing a proactive fiscal policy by appropriately strengthening it to improve its effectiveness.

Appropriately strengthening the proactive fiscal policy involves four aspects. First, China will maintain an appropriate level of fiscal spending, sending a positive signal. Second, China will rationally arrange the scale of government investment, spurring more investments and amplifying their effects. Third, China will improve transfer payments to further equalize access to basic public services, ensuring basic living needs, salary payments, and normal government expenditures at the primary level. Fourth, China will optimize and adjust tax policies to make them more precise, targeted and effective.

Improving the effectiveness of the proactive fiscal policy focuses on six aspects: tightening the government's belt, improving the composition of government spending, strengthening performance-based management, tightening financial discipline, boosting fiscal sustainability, and strengthening policy coordination. We will improve fiscal management in a sound, standardized, and law-based manner. We will ensure that every cent is used where it is needed most, and that the same amount of spending creates the greatest benefit.

We will work with a focus on the following seven priorities:

First, we will expedite our efforts to modernize the industrial system. On the one hand, we will make full use of policy instruments such as government subsidy policies, loan interest subsidy policies, and preferential tax treatment to tackle vexing issues in terms of basic products, core technologies, and key software, especially in key industrial chains such as the new generation of information technology and integrated circuits. On the other hand, we will fully leverage the guiding role of government investment, such as funds to support the transformation and upgrading of the manufacturing sector and industrial investment in advanced manufacturing. We will find market-based solutions to encourage non-government capital to invest in key manufacturing areas and open up new industrial sectors.

Second, we will vigorously boost domestic demand in two ways: investment and consumption. In terms of investment, we will expand investments that generate good returns. We will fully harness related government bonds, continue to issue a certain amount of local government special-purpose bonds, and rationally expand investment within the central government budget, giving full play to government investment's guiding and leveraging role. In terms of consumption, we will inject new impetus into consumption. In 2024, we will follow the trend of upgrading consumption by citizens, forge new drivers of growth in culture, tourism, education, and elderly care, enhance adjustment measures such as social security and transfer payments, increase incomes of urban and rural residents, and encourage consumer spending and improve spending power.

Third, we will further implement our strategies for invigorating China through science and education. We will step up investment in education and ensure the implementation of the requirement that government budgetary spending on education remains no less than 4% of GDP. Additionally, we will guarantee that education spending allocated through the government's general budget and the average education spending allocated per student continue to increase, promoting the development of a high-quality education system. We will fully support the achievement of breakthroughs in core technologies in key fields, meet the funding needs of major national science and technology projects, and make efforts to achieve greater self-reliance and strength in science and technology.

Fourth, we will support efforts to ensure and improve people's well-being. We will implement the employment priority policy, coordinate and make good use of policies on tax and fee reductions, social insurance premiums and loan interest subsidies, and support startups and employment through multiple channels. We will improve the multi-tiered and categorized social assistance system. At the same time, we will enhance budget management and channel more financial resources toward lower levels of government to maintain basic living needs, salary payments and normal government functioning, ensuring the bottom line at the primary level.

Fifth, we will step up efforts to promote comprehensive rural revitalization. We will support the implementation of a new drive to increase annual grain production capacity by 50 million metric tons, enhance investment in high-standard cropland development, ensure the incomes of grain growers, and improve the reward policy for major grain-producing counties. Another important step is to expand the scope of the full cost insurance policy and planting income insurance policy for the three major staple food crops to achieve full nationwide coverage. We will improve the ability to ensure food security, as part of our major work in implementing the national food security strategy of food crop production based on farmland management and technological application. At the same time, we must make good use of bridging funds from the central government to strengthen industrial and employment assistance, and support the consolidation and expansion of poverty alleviation achievements. What's more, we will learn and utilize the experience of the Green Rural Revival Program  to advance rural development according to local conditions.

Sixth, we will promote urban-rural development and regional development . We will vigorously promote new urbanization and support local governments in granting permanent urban residency to eligible people who move from rural to urban areas. We will further improve fiscal and tax policies that support major national strategies for regional development, and increase support for regions with unique features such as old revolutionary base areas, areas with large ethnic minority populations, and border areas.

Seventh, we will support efforts to strengthen ecological conservation. We will maintain investment, improve fiscal and tax policies, cultivate the endogenous driving force for green and low-carbon transformation and development, and promote the construction of Beautiful China pilot zones.

That's all from me. Thank you.

ThePaper.cn:

In 2023, China added 2.22899 trillion yuan in new tax and fee reductions and tax rebates and deferrals. Could you introduce the specific situation? In addition, which market entities have been the main beneficiaries? And what new considerations are there in 2024 in this regard? Thank you.

Wang Jianfan:

Thank you for your questions. In 2023, in accordance with the requirements of the proactive fiscal policy to be more efficient, more targeted and more sustainable, we coordinated the needs of corporate relief and fiscal affordability, and gave further priority to make our work more forward-looking, consistent and targeted. We extended and further refined preferential tax and fee policies. At the same time, we focused on certain areas and key links, accurately implemented a batch of new preferential tax and fee policies, truly supported the development of enterprises facing difficulties, and promoted the sustained recovery of the national economy, ensuring that the economy maintained growth momentum.

On the one hand, more than 70 expired preferential tax and fee policies were extended and refined in batches. Early last year, we had clearly extended and refined some of the preferential tax and fee policies before they expired. In the second half of the year, we continued to extend and refine a group of expired preferential tax and fee policies based on changes in the economic situation. Most of the policies will be extended directly until the end of 2027. With a focus on improving supply quality and expanding effective demand, these policies aim to provide major support for micro and small enterprises and self-employed individuals, help the real economy to get stronger and do better, build our self-reliance and strength in science and technology, increase incomes and expand consumption to meet people's basic living needs, stabilize foreign trade and investment, and support the healthy development of capital markets.

On the other hand, we focused on certain areas and key links to accurately implement new preferential tax and fee policies, mainly through the following actions. We implemented the policy of value-added tax (VAT) credit refunds in the advanced manufacturing sector to support high-quality development of manufacturing. We increased the super deduction rate of research and development expenses of integrated circuit and industrial mother-machine enterprises to enhance scientific and technological innovation. We raised the standard for special additional personal income tax deductions for care of infants and young children under the age of 3, children's education, and care of the elderly, to further reduce the burden of childbearing, childrearing and elderly care. Preferential tax treatment was given to construction and transactions of government-subsidized housing to ensure and improve people's well-being.

According to statistics from related departments, among all the newly implemented tax and fee reductions and tax rebates and deferrals nationwide in 2023, new tax and fee reductions totaled approximately 1.57 trillion yuan, and VAT credit refunds were around 650 billion yuan. In terms of industries, the manufacturing and related wholesale and retail industries added nearly 950 billion yuan in tax and fee reductions and tax rebates and deferrals, accounting for 42.6% of the total, the highest proportion of tax preferential treatment among all industries. In terms of the scale of enterprises, the new tax and fee reductions and tax rebates and deferrals for micro, small and medium-sized enterprises were about 1.43 trillion yuan, accounting for 64% of the total, and they were the most obvious beneficiaries.

In 2024, we will fully implement the deployments of the Central Economic Work Conference, carry out structural tax and fee reduction policies, maintain the continuity and stability of policies, enhance their accuracy and pertinence, and focus on supporting technological innovation and manufacturing development. We will strengthen policy supply, and promote the economy to achieve effective qualitative improvements and reasonable quantitative growth. Thank you.

China Financial and Economic News:

Data assets have become important strategic resources for promoting the development of the digital economy. We have also noticed that the MOF recently issued the Guidelines on Strengthening Data Asset Management. What are the considerations of the MOF regarding strengthening the management of data assets and promoting the development of the digital economy? Thank you.

Hou Junming:

Thank you for your concern for and attention to data asset management. As you mentioned, data assets have become important strategic resources for promoting the development of the digital economy. Therefore, it is crucial to emphasize and strengthen data asset management. In recent years, China has emerged as one of the fastest-growing countries in the global digital economy. By the end of 2022, China's digital economy had reached 50.2 trillion yuan, accounting for 41.5% of the country's GDP. General Secretary Xi Jinping has pointed out that the development of the digital economy holds great significance and represents a strategic choice to seize new opportunities in the new round of scientific and technological revolution and industrial transformation. The CPC Central Committee has made a series of decisions and deployments regarding the development of the digital economy, clearly putting forward the requirements for data asset compliance, standardization, and appreciation.

Compared with traditional assets, data, as a new type of asset, is replicable and non-excludable. These characteristics impose higher requirements on data asset management. The MOF has actively implemented the decisions and deployments of the CPC Central Committee and successively formulated and issued the Interim Provisions on Accounting Treatment of Enterprise Data Resources and the Guidelines on Data Asset Evaluation. Recently, the MOF also issued the Guidelines on Strengthening Data Asset Management, making clear provisions on the development and utilization, value evaluation, income distribution, and information disclosure of data assets. All these efforts aim to promote compliant and efficient circulation and use of data assets, unlock the full value of data assets, and enhance total factor productivity.

Next, we will focus on the following three areas:

First, we will strengthen the full-process management of data assets. We will standardize data asset registration, storage, use, disclosure, and disposal. By establishing a clear and complete management framework for data assets, we will promote data resources as assets in an orderly manner and better leverage their economic and social value.

Second, we will advance the development and utilization of data assets. We will encourage the effective supply of public data assets in accordance with laws and regulations, increase the release or disclosure of data asset information, and improve the transparency of data asset flow. We will support diversified development and utilization models in data-rich industries such as finance, transportation, healthcare, and energy. Furthermore, we will establish a reasonable income distribution mechanism to fully incentivize all participants.

Third, we will ensure the compliant and safe utilization of data assets. We will strengthen the monitoring and supervision of data assets, harness advanced technologies effectively, and rigorously mitigate management risks such as data leakage, damage, and loss. At the same time, reasonable procedures will be set up in data asset evaluation, transactions, and related processes to prevent the inflation of data asset value. 

Through these efforts, we aim to standardize and fortify data asset management, further stimulate the development of the digital economy, and facilitate equitable access to the dividends of the digital economy for all. Thank you.

Bloomberg:

Fiscal spending actually contracted in the first several months of last year. How will China pace fiscal spending and central and local government bond sales throughout this year? Secondly, what is the front-loaded quota for new local special bonds and general bonds this year, and how does it compare with last year? Thank you.

Li Xianzhong:

Thank you for your questions. Your questions actually involve two aspects: fiscal spending arrangements and government bond issuance arrangements.

Regarding fiscal spending arrangements, you just mentioned that fiscal spending contracted in the first few months of last year. In fact, during January-May 2023, the national general public budget expenditure reached 10.48 trillion yuan, an increase of 580 billion yuan compared to the same period in 2022, representing a growth of 5.8%. It should be noted that fiscal spending was substantial and progressed rapidly in the initial five months of last year. However, in June and July last year, the national general public budget expenditure slightly declined, mainly due to a one-time large expenditure during the same period in 2022. That raised the base and led to a temporary decrease in the growth rate in June and July 2023. It was in line with expectations, and there was no contraction in fiscal spending. Looking at the whole of last year, as Mr. Wang Dongwei just mentioned, the national general public budget expenditure exceeded 27 trillion yuan for the year, up 5.4% year on year. The expenditure reached a new high, demonstrating the effectiveness of proactive fiscal policies and providing strong support for economic recovery.

Regarding this year's fiscal expenditure plans, as vice minister Wang Dongwei mentioned, we are currently detailing and refining these plans in line with the directives of the CPC Central Committee and the State Council. These plans will be announced to the public following the approval of the NPC according to standard procedures. What I can confirm is that, in 2024, we will maintain the necessary intensity of fiscal spending.

These are some of our arrangements for government bond issuance. For national bonds, we plan to front-load the issuance within the NPC-approved ceiling for the outstanding balance to support necessary spending intensity. For local government bonds, under the requirements of the CPC Central Committee and the State Council, and as authorized by the NPC Standing Committee, the MOF has established and improved a management system since 2019 to allocate in advance new local government debt limits. This guides local governments to improve budget management and reasonably schedule the issuance of new local government bonds, effectively reducing financing costs and accelerating fund allocation. According to our statistics, from the establishment of this system in 2019 to 2023, the MOF allocated new local government debt limits of 1.39 trillion, 2.85 trillion, 2.36 trillion, 1.79 trillion, and 2.62 trillion yuan in respective years, totaling over 11 trillion yuan. In December 2023, after completing legal approval procedures, the MOF allocated part of the new local government debt limits for 2024 to support major project construction so that work can begin on them the moment government funds are received , leveraging local government bonds to drive economic growth.

This is all for my report. Thank you.

CCTV:

As we know, scientific and technological innovation is the logical starting point and the key driver for high-quality development. My question is, what have national finances done to improve the allocation of innovation resources and build China's self-reliance and strength in science and technology? Also, could you share any new measures planned for 2024? Thank you.

Wang Dongwei:

Thanks for your question. I'll take this one. Implementing the innovation-driven development strategy and building high-level self-reliance and strength in science and technology requires the improvement of the new system for mobilizing resources nationwide to better allocate innovation resources, boost China's strength in strategic science and technology, and promote deeper integration of the innovation, industrial, capital, and talent chains . In recent years, national finances have prioritized science and technology expenditure. From 2018 to 2023, fiscal spending on science and technology increased by an annual average rate of 6.4% from 832.7 billion yuan to 1.06 trillion yuan. At the same time, we've been utilizing various policy tools such as tax incentives, government procurement, asset management, and fiscal financing to support scientific and technological innovation. In 2023, through a series of central government policies and strong fiscal support, we saw rapid progress in establishing a national laboratory system and constructing large-scale scientific facilities. We also witnessed the successful launch of the Shenzhou-17 spaceship, the debut commercial flight of the C919 large passenger airplane, and the constant emergence of innovative outcomes in fields like artificial intelligence, quantum technology, and biomanufacturing.

In 2024, finance departments will take more robust and effective measures to drive the construction of a modern industrial system led by scientific and technological innovation and develop new productive forces. I would like to elaborate on this from two perspectives.

First, in terms of policy orientation, we should focus on four "key areas." First is emphasizing the primary role of enterprises in innovation. We'll implement structural tax cuts and fee reductions with a focus on supporting technological innovation and the development of the manufacturing sector. We aim to leverage fiscal funds to catalyze significant investment in technology innovation from financial resources and private capital, encouraging the flow of innovation resources towards enterprises. Second, we will harness the power of demand to drive innovation. By capitalizing on our vast domestic market, we aim to significantly encourage the application and iteration of innovative outcomes. This includes implementing and refining policies of subsidy for insurance for the first use of major technological equipment and new materials, addressing initial application bottlenecks in a market-oriented manner. Third, we will be committed to enhancing the resilience and security of our industrial and supply chains. This involves integrating and optimizing related fiscal special projects, focusing on key industrial chains, and supporting technological breakthroughs in critical weak areas. We will implement fiscal policies to support innovative small and medium enterprises (SMEs) that use special and sophisticated technologies to produce novel and unique products , encouraging more companies to specialize in niche markets and pursue excellence and innovation. Fourth, we will focus on boosting the enthusiasm and creativity of scientific researchers. Two important pilot reforms in this area include supporting the advancement of salary system reforms in universities and research institutes and accelerating the reform of the ownership or long-term use rights of on-the-job inventions by scientific researchers. The goal is to fully stimulate the initiative and creativity of these researchers.

Second, in terms of the use of funds, we should advance reform of the mechanisms for the allocation and use of fiscal science and technology funds. In this regard, we need to achieve the "four strengthens." First, we need to strengthen our foundations. We will increase investment in basic research, applied basic research and cutting-edge research, and improve our capabilities in original innovation. Second, we need to strengthen our ability in tackling key problems. We will double our efforts to achieve breakthroughs in core technologies in key fields, thus gaining the high ground in the scientific and technological endeavor. Third, we need to strengthen our capabilities. We will focus on national laboratories, national research institutions, high-level research universities and leading scientific and technological enterprises to support the strengthening of national strategic scientific and technological capabilities. Fourth, we need to strengthen efficiency. Projects, funds, talents as well as base innovation resources will be coordinated so as to comprehensively strengthen performance management, and strive to improve the effectiveness of government research funds.

That's all from me. Thank you.

Xinhua:

As we all know, agriculture, rural areas and rural residents serve as the ballast of China's economic development, with food security as its top priority. Last year, China had a bumper harvest in grain production. What role has the MOF played in supporting grain production and ensuring food security? And what are the plans going forward? Thank you.

Li Xianzhong:

Thank you for your questions. Food security is a matter of national importance. In 2023, the central government consistently made ensuring national food security a top priority of its financial policies to support agricultural development, providing strong and effective support for China's grain output hitting a record high. Specifically, the central government mainly focused on two aspects:

On the one hand, we optimized policy support by focusing on the foundation of food security. First, we improved and adjusted the central government's transfer payment policies related to agriculture. For example, the grain and oil production guarantee fund was set up, which was mainly used to support the construction of centralized seedling cultivation facilities, including strip-intercropping of soybean and corn. Second, we gave full play to the role of fiscal funds as the main channel, fully implemented the strategy of conserving and using arable land as well as promoting grain output through high technology, allocated 92 billion yuan to support 80 million mu of newly-built and improved high-standard farmland, actively advanced the protection and utilization of black earth, and initiated pilot projects for comprehensive utilization of saline-alkali land. We supported the campaign to revitalize the seed industry and vigorously enhanced the mechanization level in agriculture. Third, we continued to improve the policy systems for prices, subsidies and insurance. We raised the minimum purchase price for wheat, steadily implemented policies relating to farmland fertility protection subsidies and rice subsidies, increased support for major grain-producing counties, and expanded the coverage of full cost insurance and planting income insurance for the three major grain crops to all major grain producing counties across the country. Fourth, we optimized diverse input mechanisms, gave full play to the leveraging role of finance, and actively guided financial and private capital to participate in investment. We launched a pilot program to discount interest on loans for high-standard farmland.

On the other hand, we strengthened financial support focusing on the critical periods of grain production. First, at the key time of spring ploughing, we issued a 10-billion-yuan fund for granting one-off subsidies to crop-growing farmers to stabilize their expectations and reduce the cost of grain planting. Second, to prevent diseases and pests, dry and hot winds, and the collapse of summer wheat, we allocated 1.6 billion yuan to support the "three prevention measures" by crop-dusting in major wheat producing areas. Third, in response to the impact of protracted rainfall during the reap period in Henan province and typhoons and floods in some parts of northern and northeastern China, we accelerated the allocation of disaster relief funds to support wheat harvest and drying while resuming agricultural production in disaster areas, thus effectively reducing food losses due to disasters. Fourth, at the critical stage of fall harvest, 2.4 billion yuan was allocated to support "spraying to promote growth" measures for corn and soybeans in key northern areas to help increase the fall harvest.

In 2024, the central government will increase the central and provincial investment subsidy levels for the construction of high standard farmland, and continue to support campaigns including those for revitalizing the seed industry and complementing the weak links in agricultural machinery equipment. We will continue our efforts to upgrade agricultural socialized services, explore the establishment of an interest-compensation mechanism between grain production and marketing areas, optimize the diversified investment mechanism, and at the same time, strengthen the supervision of capital use and policy implementation to better safeguard national food security.

That's all from me. Thank you.

Thecover.cn:

Issues regarding the sustainability of the pension system and the timely and full payment of pensions are of concern to the public, given China's rapidly aging population. How would you respond to the public's concern? Thank you.

Hou Junming:

Thank you for your question. The issue is of great concern to everyone. It is important to ensure people's access to elderly care and improve their well-being as China's population ages rapidly. Pension payments potentially concern the interests and well-being of every Chinese citizen and their families. In recent years, finance departments at all levels have fulfilled their responsibilities to ensure pensions are paid on time and in full. Efforts have been made in the following three areas:

The first is to increase government subsidies. In 2023, the central government allocated about 1 trillion yuan in fiscal subsidies for basic pension insurance, which was weighted towards the central and western regions and old industrial bases. Local governments have proactively fulfilled their responsibilities in this regard to ensure that basic pensions are paid on time and in full.

The second aspect involves the nationwide pooling system for pension funds. Initiated in 2022, as planned by the central authorities, this system enables pension funds to be properly transferred from regions with a surplus to those facing deficits nationwide. In 2023, a total of 271.6 billion yuan of pension funds were transferred nationwide, effectively addressing the problem of pension fund surpluses in some regions and payment difficulties in others.

The third aspect concerns the management of pension funds. We have worked with relevant departments to regulate fund collection and distribution, ensuring that the policies for financing and receiving pension benefits are fairer and more reasonable. This aims to make the old-age pension system more equitable and sustainable.

Remarkable improvements have been witnessed in terms of pension fund collection and distribution thanks to the aforementioned efforts in recent years. By the end of 2023, the balance of China's pension insurance funds for urban workers stood at nearly 6 trillion yuan, ensuring timely and full pension payments.

Moreover, according to decisions and plans made by the CPC Central Committee and the State Council, we have allocated special funds to support the program to improve home- and community-based basic care services for senior citizens, as well as the program to provide concentrated care services for elderly people who cannot perform essential self-care and who are economically disadvantaged. We have introduced a series of preferential tax and fee policies to support the development of the elderly care service sector and the "silver economy" (economic activities that offer products and services to seniors). By doing so, elderly people will not only have the financial support they rely on to support them through old age but also access to affordable and high-quality care services.

In 2024, our efforts will focus on two priorities. First, the central government will allocate more financial subsidies and ensure the implementation of the nationwide pooling system for pension funds. We will intensify efforts to improve relevant systems and mechanisms to protect the funds people rely on to support them through old age. Next, we will step up support for elderly care services and improve the networks for institution, community and at-home elderly care services. We will promote the coordinated development of elderly care programs and services and improve the quality and efficiency of elderly care services. Thank you.

Chen Wenjun:

The last two questions, please.

CNR Business Radio:

Performance-based budgetary management plays a crucial role in improving the efficiency of fiscal funds. What new progress and achievements have financial authorities made in this regard? What efforts will be made to further improve the efficiency of performance-based budgetary management in 2024?

Wang Jianfan:

Performance-based budgetary management is a crucial component in improving the modern budget system. In September 2018, the CPC Central Committee and the State Council issued a guideline to establish a performance-based budgetary management system, making specific arrangements for performance-based budgetary management. Following the guidelines, the MOF established and improved the performance -based budgetary management system, enhancing its quality and efficiency. As a result, a whole-process performance-based budgetary management mechanism has taken shape, guiding all regions and departments to develop a performance-awareness culture, and improving the efficiency of fiscal policies and the quality of public services.

In 2023, we stepped up our efforts to shore up weaknesses in a targeted and problem-oriented manner, and to improve the quality and efficiency of our work in key links. We have ramped up efforts in the following six aspects:

The first aspect involves efforts in conducting trials on performance evaluation prior to the implementation of programs and policies. By combining budget reviews with project approvals, we conducted ex-ante performance evaluations for major projects that are newly added or extended by central departments and ministries, as well as newly established transfer payments, to make the budget-making process more science-based from the very beginning.

The second aspect is to strengthen the management of performance targets. We achieved full coverage in managing performance targets for project expenditures by central departments and ministries, transfer payments under shared fiscal powers, and special transfer payments. Moreover, we provided guidance to ensure that central departments, ministries, and local financial departments set their performance targets in a scientific manner. We also made greater efforts to review performance targets for key projects, improving the quality of the performance targets set.

Third, we strengthened oversight of budget performance. During the budget execution, we relied on the integrated central budget management system to carry out oversight of budget performance, analyzed key projects' implementation progress and attainment of performance targets, as well as fixed performance deviations and fund management loopholes in a timely manner.

Fourth, we improved the quality and effectiveness of performance assessment. We have organized a comprehensive performance self-assessment of central authorities' project spending, integrated transfer payments under shared fiscal powers , and special transfer payments. In accordance with the principles of priority and quality, we assessed the performance of 52 projects in key areas such as education, sci-tech, and agriculture and rural areas.

Fifth, we stepped up the application of performance assessment results. Linking the assessment results with budget arrangements, we lowered to different extents the budget for central projects with lower scores in the key fiscal performance assessment in 2023. For regions with poorer performance, we reduced transfer payment allocation modestly.

Six, we worked to report and disclose performance information. The performance goal and assessment results of key projects were reported to the National People's Congress. Together with the public disclosure of the budget and final accounts of central authorities, we organized central authorities to disclose the performance goal of 811 projects and assessments results of 745 projects, increasing from the previous year. 

Next, the MOF will continue to improve the budget performance management system in accordance with the overall requirements for a sound and modern budget system and give better play to the role of budget performance management in optimizing the allocation of resources and improving the effective use of funds. Thank you.

Phoenix Satellite Television:

The central economic work conference has made arrangements for the building of a modern industrial system. What has the MOF done to support the building of such a system? What are the policy considerations for 2024? Thank you.

Wang Dongwei:

Thank you for your questions. Your questions are very important and have been closely followed by business entities. I will answer your questions.

General Secretary Xi Jinping stressed that a modern industrial system is the material and technological foundation of a modern country and the focus of economic development must be placed on the real economy. In 2023, the MOF has taken a host of measures in a targeted way to accelerate the building of a modern industrial system underpinned by the real economy. We have taken the following measures:

First, we have accelerated the development of strategic emerging industries. We have introduced the policy of granting extra value-added tax credits for advanced manufacturing enterprises, improved the special funds for the manufacturing industry, government investment funds, insurance compensation for the application of newly developed major technical equipment, and other supporting policies. We have accelerated the advancement of key technologies and industries to make up for shortcomings and enhanced the resilience and security of industrial and supply chains. This has given rise to new industries, business models, and new momentum. Let me give you an example. For the implementation of the insurance compensation policy for the application of newly developed major technical equipment , the central government subsidized 80% of the premiums of insured companies and supported the application of more than 30,000 units or sets of major technical equipment. 

Second, we have quickly promoted the transformation and upgrade of traditional industries. By utilizing the special central fund for boosting the manufacturing sector, we rendered stronger support to new-generation information technologies and industrial internet platforms to provide technological support for the digital transformation of traditional industries. We have allocated 3 billion yuan to pilot the digital transformation of SMEs in various cities. A total of 30 pilot cities have been identified in the first batch on the basis of merit to guide local governments, strengthen policy coordination, and promote the in-depth integration of the digital economy and the real economy.

Third, we have vigorously promoted the development of enterprises that use special and sophisticated technologies to produce novel and unique products. We have continued to provide financial awards and subsidies for such SMEs and guided them to be more innovative and specialized. By the end of 2023, we had fostered more than 12,000 national-level "small giant" enterprises that use special and sophisticated technologies to produce novel and unique products, and over 100,000 provincial ones in China. The national fund for the development of SMEs has been fully tapped into to mobilize non-government capital to support innovation and development of seed and startup-stage SMEs with growth potential. By the end of 2023, the SME development fund had invested in 36 sub-funds, with an accumulative investment of 47.76 billion yuan, of which more than 70% was invested in seed and startup-stage, growth SMEs. 

In 2024, the MOF will focus on developing new types of industrialization and enhancing the core competitiveness of industries. We will give full play to the leading role of fiscal funds and the credit enhancement role of government investment funds to create a lever effect, supporting the rapid development and expansion of strategic emerging industries. Efforts will also be made to promote the transformation and upgrade of traditional industries at a faster pace, promote the cultivation and exploration of new tracks of industries in an accelerated way, and effectively serve the building of a modern industrial system. 

That's all for my answers to the questions. Thank you.

Chen Wenjun:

Thanks to all the speakers and journalists here. Today's briefing is now concluded. See you all.

Translated and edited by Xu Xiaoxuan, Wang Qian, Wang Yanfang, Liu Sitong, Yan Bin, Wang Wei, Yan Xiaoqing, Guo Yiming, Li Xiao, Zhang Tingting, Li Huiru, Gong Yingchun, Huang Shan, Cui Can, David Ball, Tom Arnsten, and Jay Birbeck. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.