Read in Chinese

Speakers:

Mr. Wang Dongwei, 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

Mr. Fu Jinling, director general of the Department of Economic Construction of the MOF

Chairperson:

Ms. Xing Huina, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO

Date:

July 31, 2024

Xing Huina:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO), as part of the series "Promoting High-Quality Development." Today, we have invited Mr. Wang Dongwei, vice minister of finance, to brief you on relevant developments and answer your questions. Also present today are 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; and Mr. Fu Jinling, director general of the Department of Economic Construction of the MOF. 

Now, I'll give the floor to Mr. Wang for his introduction.

Wang Dongwei:

Ladies and gentlemen, good morning. I am delighted to meet with you here to introduce how the MOF promotes high-quality development.

First, on behalf of the MOF, I would like to express my heartfelt gratitude for your long-term concern, support and assistance regarding our financial work.

General Secretary Xi Jinping has emphasized that pursuing high-quality development is our top priority in the new era. In recent years, the MOF has focused on this main goal of high-quality development by continuously optimizing financial policy, ensuring funding for strategic tasks, strengthening fiscal and taxation systems, and deepening international financial cooperation to pursue higher-quality economic growth and appropriately increase economic output. Here, I will introduce four key areas.

First, we have strengthened and improved macroeconomic regulation. We have implemented proactive fiscal policies, and utilized a combination of tools such as deficits, special-purpose bonds, financial subsidies, interest discounts, and tax measures to promote sustained economic recovery and growth. On the one hand, we have optimized and improved tax and fee reduction policies to help reduce the economic burden on businesses and enhance their growth potential. This year, we have further improved the precision and effectiveness of these policies, with a focus on supporting technological innovation and manufacturing development. On the other hand, we have prudently determined the deficit rate and effectively used special-purpose bonds for local governments and treasury bonds to provide necessary support for economic and social development. Since the 20th National Congress of the Communist Party of China (CPC), we have allocated an additional 11.35 trillion yuan in special-purpose bonds to support around 90,000 projects aimed at addressing weaknesses and improving people's well-being, thereby encouraging increased effective social investment. Last year, we issued an additional 1 trillion yuan in treasury bonds, with most projects now already underway. This year, we have allocated 1 trillion yuan in ultra-long-term treasury bonds to support the implementation of major national strategies, enhance security capabilities in key areas, and facilitate a new round of large-scale equipment upgrades and consumer goods trade-in programs. Meanwhile, we have also strengthened the coordination between fiscal, monetary and industrial policies to better leverage their effectiveness.

Second, we have focused on strengthening financial support for major national strategic tasks and essential public welfare by increasing investment in key areas such as science and technology, education, agriculture and rural development, and ecological protection. We aim to enhance high-quality development. We have diligently implemented the requirement that Party and government departments must run on lean budgets, being thrifty with small expenses and generous with significant ones, allocating more financial resources toward promoting development and safeguarding public welfare. In this year's budget, the top four areas of fiscal expenditure are education, social security and employment, agriculture, forestry and water resources, and health, accounting for nearly 50% of the total. Additionally, we have strongly supported greater self-reliance and strength in science and technology, significantly enhancing our country's innovation capacity, with our national innovation index ranking steadily rising to 10th globally. The level of public welfare continues to improve, with the minimum subsistence allowance for rural areas increasing by 73.3% since 2017, and the minimum subsistence allowance for urban areas rising by 45.4% on average. Basic old-age insurance covers nearly 1.1 billion people, and over 1.3 billion people are enrolled in medical insurance. The environmental sustainability of our economic development has continuously improved. Over the past decade, we have supported an average annual economic growth rate of 6.1%, with an average annual energy consumption growth rate of 3.3%. Since the 13th Five-Year Plan (2016-2020) period, the average PM2.5 concentration in cities at the prefecture level and above has decreased by 28.6%, and the proportion of surface water bodies with water quality rated "good" nationwide has increased by 21.6 percentage points. We can say that the skies are bluer, the mountains are greener, and the waters are clearer.

Third, we have focused on building a high-standard socialist market economy. We have continued to deepen reform of the fiscal and tax systems, aiming to inject vitality and boost momentum for high-quality development. The reform of the budget system has deepened comprehensively. The efficiency of fiscal resource allocation and the effectiveness of fund use have improved constantly. The sound tax system has been established. The system taxing personal income on the basis of both adjusted gross income and specific types of income has been optimized and refined. Reforms on value-added, consumption, resource, and environmental taxes have continued to advance. These efforts have accelerated the formation of a unified national market and facilitated economic transformation and upgrading. The fiscal relationship between the central and local governments has continued to improve. The system of transfer payments has operated more soundly, and incentive and constraint mechanisms through transfer payments have been set up to boost high-quality development. From 2022 to 2024, the central government transfer payments to local governments totaled approximately 30 trillion yuan, propelling coordinated regional development and ensuring equal access to basic public services.

Fourth, we have promoted alignment with high-standard international economic and trade rules, deeply engaged in global economic governance, and continuously promoted high-standard opening up. China's overall tariff level currently stands at 7.3%, lower than the 9.8% WTO accession commitment. We have applied lower temporary import tariff rates to about 1,000 products and implemented preferential conventional tariff rates with 32 countries and regions. This approach benefits our people with quality products and allows the global community to share opportunities created by China's development. We have implemented "zero tariff" and offshore duty-free shopping policies in Hainan province to boost openness. We have also pursued the Global Development Initiative, the Global Security Initiative, and the Global Civilization Initiative. Furthermore, we have actively participated in multilateral mechanisms such as the G20 and BRICS and promoted high-quality Belt and Road cooperation.

Moving forward, the MOF will fully implement the guiding principles from the 20th CPC National Congress, as well as the second and third plenary sessions of the 20th CPC Central Committee. We will also earnestly implement the deployments made at the meeting of the Political Bureau of the CPC Central Committee held on July 30. Our focus will be on continuously enhancing macro-fiscal control, deepening reform of the fiscal and tax systems, and improving the efficiency of fiscal governance. These efforts aim to maximize our financial sector's contribution to building a great country and moving toward national rejuvenation on all fronts.

Thank you for your attention. My colleagues and I are now ready to take your questions.

Xing Huina:

Before asking your question, please raise your hand and identify your news agency. 

CCTV:

We've noticed that issues such as advancing consumption tax reform and developing local tax systems have been widely discussed recently. Therefore, what specific plans does the MOF have for improving these tax systems? Thank you.

Wang Dongwei:

Thank you for your question. I've noticed the extensive media coverage of these issues, as well as the valuable insights and suggestions offered by experts and scholars.

Since the introduction of the tax revenue-sharing system in 1994, and especially following the third plenary session of the 18th CPC Central Committee, our fiscal and tax systems have continued to improve. The current local tax systems have gradually developed, playing a crucial role in ensuring financial strength of local governments and supporting sustained, healthy economic and social development. However, as China's economy is transitioning to a stage of high-quality development, we recognize that our local tax systems still require improvement. We need to optimize the structure and allocation of tax rights and address other prominent issues.

The third plenary session of the 20th CPC Central Committee has provided comprehensive arrangements and clear requirements for deepening fiscal and tax system reforms. I'll address your question in three aspects:

First, we will expand the sources of tax revenue at the local level. Currently, the central government collects excise tax, a major revenue generator, primarily at the production and import stages. We plan to move excise tax collection further down the production-to-consumption chain, with the power of collection steadily being passed to local governments. This transition will consider the division of revenue between central and local governments and tax administration capabilities. Implementation will be item-specific and phased, aiming to expand local revenue sources and encourage improvements in local consumption environments. We will look into rolling the urban maintenance and construction tax, education surcharges, and local education surcharges into one single local surtax. Local governments will have the authority to set the rate for this tax within a predetermined range. We also plan to reform the environmental protection tax to include volatile organic compounds in its scope.

Second, we will moderately expand local tax rights. In recent years, in legislations on local taxes, such as the Environmental Protection Tax law, Resource Tax Law, and the Tax Law on Farmland Used for Non-agricultural Purposes, provincial-level government has the authority to set the rate for these taxes within a predetermined range and implement tax deductions and exemptions, among other administrative rights. Moving forward, while maintaining the central government's unified legislation and the right to begin collecting certain types of taxes, we will explore ways to give more power to local authorities in determining elements of local tax systems and their implementation.

Third, we will regulate the management of non-tax revenue. Non-tax revenue primarily belongs to local authorities and is a crucial component of local financial resources. We plan to regulate the management of non-tax revenue, appropriately delegate some management authority to local governments and allow them to tailor their practices to local conditions. We will further reform the system of paid use for natural resources. All revenues generated on the basis of the exercise of administrative power, government credit, and state-owned resources and assets will be placed under government budget management. For toll highways, we will adhere to the "beneficiary pays" principle to optimize related policies.

Next, we will fully implement the tasks outlined in the third plenary session's resolution, thoroughly explore and assess specific reform plans as well as launch them once they are mature.

Thank you.

China Daily:

This year, extreme weather events have been frequent in China with many areas experiencing natural disasters, such as rainstorms and floods, and some provinces have even been severely impacted. Could you please elaborate on the work that the Ministry of Finance has done to support local disaster reduction and relief efforts? What are the considerations for the next steps? Thank you.

Wang Dongwei:

I will have my colleague, Mr. Fu Jinling, answer this question.

Fu Jinling:

Thank you for your questions. As you mentioned, since the start of this year's flood season, China has experienced 23 instances of widespread heavy rainfall, affecting over 20 provinces, autonomous regions and municipalities to varying degrees with torrential rains and floods. Some areas have even suffered from the impact of heavy rainfall repeatedly. In accordance with the decisions and arrangements of the CPC Central Committee and the State Council, the Ministry of Finance has always adhered to the principles of putting people and their lives first. We have focused on three aspects: "building mechanisms, strengthening safeguards and prioritizing efficiency," effectively ensuring the safety of people's lives and property.

In terms of building mechanisms, the Ministry of Finance closely coordinates with the departments of emergency management, agriculture, water resources and transportation to establish three stable and efficient work mechanisms. This includes a disaster information sharing mechanism, a rapid approval and allocation mechanism for central natural disaster relief funds, and a tiered responsibility mechanism for post-disaster recovery and reconstruction. Each department closely monitors the occurrence, development and changes in natural disasters across regions, strengthens disaster reporting as well as conducts pre-research, anticipation and prediction in response preparation. Once a major natural disaster emergency response is initiated, the Ministry of Finance immediately disburses funds through the rapid approval and allocation mechanism for disaster relief funds, supporting local authorities in organizing timely rescue and relief efforts and properly resettling affected populations. After the disaster, efforts are accelerated to support recovery and reconstruction to quickly restore order to production and daily life in the affected areas.

In terms of strengthening safeguards, since the beginning of this year, the central government has allocated 11.5 billion yuan in disaster relief funds to localities, providing strong financial support. These funds include natural disaster relief funds for the relocation, settlement and emergency rescue of affected populations, agricultural disaster prevention and relief funds for restoring agricultural production, water conservancy disaster relief funds for repairing water-damaged water conservancy facilities, and funds for emergency road clearance and infrastructure construction. In 2023, an additional 1 trillion yuan in government bonds was issued, specifically for post-disaster recovery and reconstruction and enhancing disaster prevention, mitigation and relief capabilities, providing solid financial support for disaster prevention and mitigation efforts across the country this year.

In terms of prioritizing efficiency, since the beginning of this year, the Ministry of Finance has activated the rapid approval and allocation mechanism for natural disaster relief funds six times. The central natural disaster relief funds were disbursed within 24 hours following disasters such as the breach of the Dongting Lake dike in Yueyang, Hunan province, the outbreak of flash floods and mudslides in Ya'an, Sichuan province, and the collapse of a highway bridge due to torrential rains in Shangluo, Shaanxi province. This provided financial support to ensure that the affected populations had a place to stay, hot meals and clean drinking water. At the same time, the Ministry of Finance bears in mind that disaster relief funds are money for critical needs of the people, always strictly supervising its use as well as resolutely and seriously investigating and punishing any violations as soon as they are discovered.

China is currently in the critical flood control period from late July to early August, heightened by the active phase of typhoons, the flood control situation has become increasingly severe and complex. Next, the Ministry of Finance will resolutely implement the important speeches of General Secretary Xi Jinping and the guiding principles from the meeting of the Standing Committee of the Political Bureau of the CPC Central Committee on July 25. We will always maintain a tight focus on flood prevention and control, continue to strengthen close communication with relevant departments, carefully track the development and changes of the disaster situation, timely allocate disaster relief funds, and resolutely win the tough battle of flood prevention, control and disaster relief. Thank you.

South China Morning Post:

Many experts believe that the fiscal policy in the first half of the year was tight, leaving significant room for further action. Given that economic growth in the second quarter was below expectations, how will the financial department intensify its efforts in the second half of the year? Will there be large-scale stimulus or expansionary fiscal policies? Thank you.

Lin Zechang:

Thank you for your questions. In 2024, our proactive fiscal policies have been moderately strengthened, improved and made more efficient. Key arrangements were announced following the "two sessions," and since the beginning of this year, we've been actively implementing these decisions in line with the CPC Central Committee's directives, providing robust support for the economy's recovery and improvement.

I would like to share some figures with you. In the first half of the year, the national general public budget expenditure totaled 13.7 trillion yuan. Central government transfer payments to local governments reached 8.99 trillion yuan, accounting for 88.1% of the annual budget. The additional 1 trillion yuan in government bonds issued last year has been fully allocated to local governments and primarily invested in projects. As for this year's new local government bonds, 1.9 trillion yuan had been issued by July 26, with a focus on areas including new infrastructure and new industries, and special bond quotas are allocated to regions with well-prepared projects and high usage efficiency. Additionally, 1 trillion yuan in ultra-long-term special bonds has been allocated this year to support major projects, with 418 billion yuan issued by July 24. Meanwhile, we are strictly adhering to the requirement for Party government bodies to practice frugality, striving to be more efficient with government spending.

Various macroeconomic policies, including fiscal policies, are now showing results, bolstering internal momentum for economic development. The economy is stable and continues to advance steadily. In the first half of the year, GDP grew by 5% year on year. The trend of industrial transformation toward "new" and "green" is becoming more pronounced. Investments in high-tech industries increased by 10.6% year on year, while technological upgrades in manufacturing saw a 10% increase. These developments mark new progress in high-quality development.

Moving forward, we will thoroughly study and implement the guiding principles of the third plenary session of the 20th CPC Central Committee and the recent meeting of the Political Bureau of the CPC Central Committee. We will intensify policy implementation to promote sustained economic recovery and improvement. Our focus will be on four key areas of work:

First, we will better leverage the amplifying effect of government investment. Based on needs and project readiness, we will issue and utilize ultra-long-term special government bonds on schedule. This proactive approach aims to support the implementation of major national strategies and enhance security capacity in key areas. We will guide local governments to expedite the issuance and use of special bonds, accelerate the deployment of additional government bond funds and central budget investments, and increase tangible outcomes.

Second, we will intensify efforts to promote large-scale equipment upgrades and the replacement of consumer goods. A notice has been issued to allocate approximately 300 billion yuan in ultra-long-term special government bond funds to support and advance these initiatives. We will actively collaborate with relevant departments to ensure the effective implementation of these measures.

Third, we will continue to strengthen basic living standards. This will be achieved by implementing fiscal and tax policies in areas such as employment, education, elderly care and healthcare, as well as enhancing financial support and reinforcing the safety net for people's livelihoods.

Fourth, we will strengthen fiscal revenue and expenditure management. We will strictly organize revenue collection in accordance with laws and regulations, and avoid excessive taxes and fees. We will rigorously control non-essential and non-priority expenditures to ensure that fiscal funds are used effectively. Additionally, we will enhance accountability across all levels of government to ensure stable management of local finances.

That's all from me. Thank you.

CNBC:

What changes has the directive of the third plenary session brought to the fiscal relationship between the central and local governments? In which areas are these changes mainly reflected? Thank you.

Wang Dongwei:

Mr. Wang Jianfan will answer your questions. 

Wang Jianfan:

Thank you for your questions. The fiscal relationship between the central and local governments is a fundamental component of our government structure's division of powers and responsibilities. Since the 18th CPC National Congress, the CPC Central Committee with Comrade Xi Jinping at its core has attached great importance to the adjustment and improvement of this intergovernmental fiscal relationship. We've made advancements in deepening fiscal and tax system reforms, achieving multiple breakthroughs and significant progress. We've essentially completed reforms delineating fiscal powers and expenditure responsibilities in key areas. We've also made timely adjustments to revenue allocation between central and local governments, gradually improved the fiscal transfer payment system, and pushed forward with reforms of fiscal systems below the provincial level. Fiscal system reforms have been crucial in enhancing the central government's macroeconomic control capabilities, motivating local governments to drive economic development, and promoting the formation of a unified national market. These changes have effectively propelled sustained and healthy economic and social development.

The third plenary session of the 20th CPC Central Committee laid out a series of new directives for reforming and improving the fiscal relationship between the central and local governments, setting clear goals and directions for deepening fiscal system reform.

In terms of revenue division, we will place more fiscal resources at the disposal of local governments and will expand the sources of tax revenue at the local level. We will take steps to move excise tax collection further down the production-to-consumption chain, with the power of collection steadily being passed to local governments, while optimizing the ratio for taxes shared between the central and local governments. We'll standardize the management of non-tax revenues and appropriately delegate some non-tax revenue management authority to local governments, allowing them to implement differentiated management based on local conditions.

In terms of transfer payments, we will improve the system of transfer payments, overhaul special transfer payments, and increase the scale of general transfer payments. These will help ensure that the fiscal resources of prefecture- and county-level governments are commensurate with their powers. We will establish incentive and constraint mechanisms through transfer payments to promote high-quality development. We will focus on overhauling special transfer payments and increasing the scale of general transfer payments. This aligns with the goal of reforms to place more fiscal resources at the disposal of local governments.

Regarding the division of fiscal powers and expenditure responsibility, the central government will hold more fiscal powers as appropriate and raise the proportion of central government expenditure accordingly. In principle, the expenditures commensurate with such powers should be allocated from the central government, and such powers to be delegated to local governments should be reduced. No requirements for supporting funds from local governments in violation of regulations shall be made. When it is necessary to delegate fiscal powers to local governments, the relevant funds should be arranged through special transfer payments. 

Following the guiding principles of the third plenary session of the 20th CPC Central Committee, the MOF will make efforts to establish a fiscal relationship between the central and local governments that features well-defined powers and responsibilities and the appropriate allocation of resources, with an optimum balance between regions. We will ensure the implementation of reforms with relentless perseverance to keep the central and local governments fully motivated. Thank you.

China Financial and Economic News:

The resolution said that China will improve institutions and mechanisms for fostering new quality productive forces in line with local conditions, as well as the systems for promoting full integration between the real economy and the digital economy. Looking ahead, what kinds of proactive fiscal policies will be implemented to create new growth drivers and strengths? Thank you.

Wang Dongwei:

Thank you for your question. This is an important issue, and it's also a complex one. Our overall consideration is to effectively implement a series of fiscal and tax policies that support scientific and technological innovation, ultimately driving industrial upgrades. Let me briefly introduce five aspects of this approach:

First, we will focus on strengthening the foundation and targeting key areas to support and enhance technological innovation capabilities. We will continue to prioritize science and technology as a key area of fiscal expenditure. The central government earmarked 370.8 billion yuan toward science and technology expenditure in this year's budget, marking a 10% year-on-year increase. We will substantially support the integrated development of scientific and technological innovation and industrial innovation. We will continuously scale up investment in basic, applied and frontier research while refining the investment mechanism for basic research, which features a combination of competitive funding and stable support. Several major national sci-tech innovation projects will be launched. We will also strive to secure breakthroughs in core technologies within key fields, promote the integrated and clustered development of strategic emerging industries, and accelerate the cultivation and growth of future-oriented industries. 

Second, we will focus on expanding channels and boosting empowerment to promote the deep integration of the real and digital economies. A series of policies and measures have been introduced to support this integration. Here, I would like to introduce two pilot programs. First, we launched a three-year pilot program for the digital transformation of small- and medium-sized enterprises in 2023. This program will be rolled out in 90 cities in three phases. Currently, 66 cities have already begun implementing the pilot. The second program is to allocate 18 billion yuan, which will also be distributed in three batches, to support 60 cities in conducting pilot programs for new technological transformations in the manufacturing sector.

Third, we will focus on removing obstacles and boosting consumption to propel high-quality development in the service industry. Several pro-growth measures have been introduced to support a new round of large-scale equipment upgrades and consumer goods trade-ins. Ultra-long special treasury bonds have been issued recently, worth approximately 300 billion yuan. We will fully implement the decisions and deployments of the CPC Central Committee, enhance local governments' capabilities in promoting consumption, and foster new modes and new forms of consumer spending. In addition, we will improve the commercial circulation network layout and launch pilot programs for building modern commercial circulation systems. We will launch special funds dedicated to the disposal of waste electrical and electronic products, with a budget of 7.5 billion yuan this year, to promote recycling. We will allocate over 11 billion yuan to support demonstration projects in key overseas-oriented industries, such as electronic information, construction machinery, and medicine, improving the quality and efficiency of foreign trade.

Fourth, we will focus on strengthening weak links and improving efficiency to reinforce the development of modern infrastructure. We will comprehensively use policies such as additional issuance of treasury bonds, special local government bonds, vehicle purchase tax funds, and central government budget for investment, improving the quality and efficiency of infrastructure efforts. Since 2022, approximately 18 billion yuan has been allocated to support and reinforce national comprehensive freight hubs in 25 cities, and such work will continue this year. We will support the digital transformation of major expressways, improving their carrying capacity, traffic efficiency, and safety levels. Simultaneously, we will help about 200 counties nationwide boost development of rural charging and battery-swapping facilities, addressing the shortfall in infrastructure. This initiative will increase the consumption of new energy vehicles in rural areas.

Fifth, we will focus on tackling difficulties and removing choke points, so as to enhance the resilience and security of industrial and supply chains. We will support efforts to resolve bottleneck issues in industrial and supply chains by implementing a combination of policies. We will also provide support to boost key industrial chains such as integrated circuits, industrial machine tools, medical equipment, instruments, industrial software as well as basic software, and to build industrial and supply chains that are self-supporting and risk-controllable.

That's all for my answer. Thank you.

National Business Daily:

The State Council executive meeting studied boosting support for large-scale equipment upgrades and consumer goods trade-ins. What new measures will the central finance authorities take in this new round of equipment renewals and consumer goods trade-ins?

Wang Dongwei:

My colleague Mr. Fu Jinling will answer this question.

Fu Jinling:

Thank you for your question. This currently is a hot topic and a policy that is eagerly anticipated by people from all walks of life.

At the beginning of this year, General Secretary Xi Jinping presided over the fourth meeting of the Central Financial and Economic Affairs Commission, making comprehensive arrangements for large-scale equipment renewal and consumer goods trade-ins. Recently, the State Council held an executive meeting to make plans for boosting support in this regard. The MOF has been committed to implementing the decisions and plans of the CPC Central Committee and the State Council, researching and proposing a package of policies and measures. The ministry has made definite arrangements for the allocation of roughly 300 billion yuan in ultra-long special treasury bonds, increasing support in key areas with equipment renewal and further enhancing at the local level the capacity for consumer goods trade-ins. These efforts mainly focus on three aspects:

First, we will focus on greater efforts to boost investment and consumption confidence. We will provide further support for equipment renewal and replacement within key areas. For instance, in terms of automobile scrapping and renewal, for those who scrap passenger cars meeting certain criteria and then purchase new energy or fuel vehicles, we will increase the subsidy per vehicle from 10,000 yuan and 7,000 yuan to 20,000 yuan and 15,000 yuan, respectively, doubling the previous amounts. In terms of agricultural machinery scrapping and renewal, the subsidies for scrapping machinery like combined harvesters and seeders, and replacing them with the same type of machinery, will be increased by no more than 50% based on the current standards. In terms of loan interest subsidy, the interest discount for equipment renewal loans will be increased from 1 percentage point to 1.5 percentage points per annum, subsidized by the central government, further reducing financing costs for business entities.

Second, we will focus on meeting a wider range of investment and consumption needs. We will extend the support scope for equipment renewal to include the energy and power sectors as well as upgrading old elevators. We will also include in the support scope for consumer goods trade-ins the replacement of individual passenger cars, home appliances and electric bicycles, as well as the purchasing of materials for the renovation of old houses, kitchens and bathrooms, and home modifications for the elderly's convenience. These measures aim to better satisfy the people's needs of upgrading consumption and to continuously raise their quality of life.

Third, we will focus on better support to enhance the capacity for promoting consumption locally. Subsidy funds for the scrapping and renewal of cars and old operating freight vehicles, the renewal of new energy buses and their batteries as well as home appliance trade-ins will be jointly covered by the central and local finances in an overall ratio of 9:1. To be specific, the central finance will cover 85%, 90% and 95% of the subsidies in the eastern, central and western regions, respectively, significantly easing the local expenditure pressure. Additionally, local governments will be granted greater decision-making power. Apart from the categories with supporting standards clearly defined by the central financial authorities, a certain amount of funds will be allocated for local governments to conduct trade-ins for other categories of consumer goods in light of local conditions. The specific supported categories and standards will be determined by local governments to better unleash consumption potential.

That's all for my answer. Thank you.

ThePaper.cn:

Considering the current fiscal revenue and expenditure situation, how can local governments ensure a necessary level of spending intensity? What measures will the MOF take to better ensure sufficient fiscal strength of local governments? Thank you.

Wang Jianfan:

Thank you for your questions. From January to June, local general public budget revenue reached nearly 6.6 trillion yuan, with a year-on-year growth of 0.9%. The relatively small growth rate in the first half of the year can be attributed to several factors. First, tax deferrals for micro-, small and medium enterprises raised the base figure last year. Second, the continued decline in prices of some energy and mineral products has impacted the realization of general public budget revenue. Third, the policy introduced in the middle of last year to increase the special additional deductions for individual income tax has this year led to a delayed reduction in revenue. Additionally, land transfer revenue, which has garnered significant attention, amounted to 1.53 trillion yuan in the first half, a decrease from the same period last year but with a narrowing decline. Overall, local fiscal revenue growth showed a monthly rebound trend from January to June. During this period, local general public budget expenditures reached 11.8 trillion yuan. Monitoring indicates that expenditures for basic living needs, salary and governments function at the primary level are secure, and expenditures on key sectors such as social security, employment, education, agriculture, forestry and water resources are well protected.

Furthermore, as reflected in the 2024 budget report, the central government has increased transfer payments to local governments. The total central-to-local transfer payments for 2024 are 10.2 trillion yuan, with 8.99 trillion yuan already being allocated by the end of June, accounting for 88.1% of the total.

Comparing these figures, we see that in the first half of the year the central government allocated 8.99 trillion yuan in transfer payments, while local general public budget revenue was 6.6 trillion yuan and general public budget expenditures were 11.8 trillion yuan. From both the revenue and expenditure perspectives, fiscal resources are sufficient to cover expenditures.

In summary, local fiscal operations generally remain stable. Looking forward, the MOF will resolutely implement the decisions made at the third plenary session of the 20th Central Committee of the CPC, further deepen the reform of fiscal and taxation systems, improve the budget system, refine the fiscal transfer payment system and ensure that the fiscal resources of prefecture- and county-level governments are commensurate with their powers. Thank you.

Cnr.cn:

My question is about ensuring citizens' wellbeing. In recent years, China has invested significantly in society and people's livelihood, as was mentioned by the minister earlier. The third plenary session of the 20th Central Committee of the CPC also made new arrangements for ensuring the people's wellbeing. What work has the MOF done to promote a sound social security system and to support employment and medical services? Moving forward, what are the plans and considerations? Thank you.

Wang Dongwei:

I'll invite Mr. Lin Zechang to answer these questions.

Lin Zechang:

Thank you for your questions. Social security is closely tied to the people's wellbeing and social equity. Since the 18th CPC National Congress, the CPC Central Committee has placed the development of the social security system in an even more prominent position. In line with the decisions and deployments of the CPC Central Committee, the MOF has prioritized support for ensuring and enhancing the people's wellbeing, focusing on issues of concern to the general public. In 2023, nationwide fiscal expenditures on social security, employment and healthcare totaled 6.23 trillion yuan, accounting for 22.7% of the country's general public budget expenditures for the year. Pensions have steadily increased, and a multi-tiered and multi-pillar old-age insurance system has become more robust with a basic elderly care system taking initial shape. Subsidies for basic medical insurance have continued to be raised with the per capita government subsidies for basic medical insurance for rural and non-working urban residents increasing to 640 yuan, and the reimbursement rates for hospitalization expenses covered by basic medical insurance for urban employees and rural and non-working urban residents stabilized at 80% and 70%, respectively. Social assistance policies have become more targeted, with the average monthly standard for urban and rural subsistence allowances reaching, per person, 786 yuan and 621 yuan, respectively. The employment-first strategy has been fully implemented, promoting overall employment stability. Supporting policies on childbirth have been improved, and public-interest childcare service demonstration projects have been organized and carried out. In general, people's livelihood in fiscal funding arrangements has continued to be prioritized, ensuring people's living needs are better met.

The third plenary session of the 20th Central Committee of the CPC made new arrangements for ensuring people's wellbeing. The MOF will increase investment, improve mechanisms and work with relevant departments to effectively address the concerns of the people, in accordance with the requirements of the CPC Central Committee.

In terms of elderly care, we will improve the unified national management system for basic old-age insurance funds, refine the mechanisms for financing and adjusting benefits and gradually raise the basic pension benefits for rural and non-working urban residents under the basic old-age insurance scheme. We will provide supports to boost the supply of basic elderly services, work faster to shore up weaknesses in rural elderly care services and ensure that the basic elderly care needs of groups with special difficulties are met.

In terms of medical services, we will refine the mechanism for financing basic medical insurance for rural and non-working urban residents, deepen reforms of medical insurance payment methods, improve the unified management of major disease insurance and medical assistance scheme, and tighten oversight over medical insurance funds. We will improve the public health system and deepen the reform of public hospitals to see that they better serve the public interest. We will also strengthen the top-level design of the insurance schemes for long-term care.

In terms of employment, we will strengthen coordination and synergy with employment policies and make sure our efforts are aligned with them. We will enhance the employment support system for key groups, such as college graduates and migrant workers, develop a sound system for lifelong vocational skills training, and work hard to tackle structural unemployment.

In terms of childcare, we will improve the policy system and incentive mechanisms for boosting the birth rate, enhance the development of a public-benefit childcare service system, and strive to build a childbirth-friendly society.

That is all from me. Thank you.

N Video from Nanfang Metropolis Daily:

The MOF previously mentioned that more efforts will be made to strengthen coordination between fiscal and financial policies, allowing further leverage of fiscal funds. What measures will the MOF take to promote high-quality development of key areas such as micro and small enterprises, agriculture, rural areas, rural residents, and technological innovation? Thank you.

Wang Dongwei:

I will answer this question.

In recent years, while implementing proactive fiscal policies, we have placed great emphasis on coordinating with monetary, industrial and other related policies. We have effectively utilized tools such as fiscal interest subsidies, grants and subsidies, policy-based financing guarantees and policy-based finance, giving play to the leverage role of fiscal funds and encouraging more financial resources and nongovernmental investment into key areas such as modern industries, inclusive finance and green development. This approach promotes a high-level virtuous cycle among technology, industry and finance.

Here are a few points I'd like to introduce:

First, we will enhance the quality and effectiveness of the policy on providing subsidies for agricultural insurance premiums. In 2023, China's agricultural insurance premiums reached 140 billion yuan, among which nearly 80% were from government subsidies. This year, its agricultural insurance premiums are expected to reach 160 billion yuan. The agricultural insurance policy covers 16 bulk agricultural products, including grain, cotton and sugar, as well as over 500 local distinctive agricultural products, providing approximately 4.5 trillion yuan in risk protection for over 160 million farmer households. This year, the central government's budget for agricultural insurance premium subsidies is 56.2 billion yuan, with 19.3 billion yuan allocated for the comprehensive implementation of full cost insurance and planting income insurance for the three major staple grains (rice, corn and wheat) nationwide. In the second half of the year, we will also expand the coverage of full cost insurance and planting income insurance for soybeans in an orderly manner, to support and consolidate national food security and the supply of important agricultural products.

Second, we will strengthen government financing guarantees to support technological innovation. We have just launched a special guarantee plan to support technological innovation. By enhancing the risk-sharing and compensation efforts of the National Financing Guarantee Fund, we aim to encourage banks and policy guarantee institutions to strengthen financing support for technology-based small and medium-sized enterprises (SMEs). We have increased the maximum guarantee amount for a single enterprise from 10 million yuan to 30 million yuan, thereby mobilizing more financial resources to support technological innovation.

Third, we will better leverage the guiding role of government investment funds. Currently, the central authorities are supporting the development of government investment funds, such as the National Integrated Circuit Industry Investment Fund and the National Manufacturing Transformation and Upgrade Fund, to drive nongovernmental investment, thereby effectively supporting the implementation of major national strategies. For example, the National SME Development Fund, with a total scale of 35.7 billion yuan, has invested in 42 sub-funds, helping these projects raise more than 480 billion yuan in new equity financing. In addition, more than 70% of the fund has been invested in over 1,200 newly established SMEs. Moving forward, we will further enhance the leverage role of government investment funds to support the rapid development of new industries, new models and new growth drivers.

Fourth, we will thoroughly implement the policy of providing fiscal subsidies for interest payments, which is also a key measure for equipment renewal. The central government will pay 1.5% of the interest payments of those qualified business entities for two years. Totaling 20 billion yuan, such fiscal subsidies will support these business entities in equipment renewal and technological transformation, which are expected to drive related loan volumes to over 660 billion yuan. We will actively, prudently, and orderly advance the pilot program for providing loan interest subsidies to develop high-standard farmland, guiding more financial resources and nongovernmental investment into the agricultural sector.

Lastly, we will strengthen agricultural credit guarantee services. As of the end of June, there were 1.1 million agricultural credit guarantee projects nationwide, with an outstanding balance of 395 billion yuan. Moving forward, we will increase support for new agricultural business entities and make greater efforts to enhance credit guarantee services for the production of key agricultural products such as grain and soybean oil.

That is all from me. Thank you.

Xing Huina:

Thank you to all the speakers and participating journalists. Today's press conference will end here. Goodbye, everyone.

Translated and edited by Wang Yiming, Wang Qian, Liu Sitong, Wang Yanfang, Zhang Rui, Huang Shan, Qin Qi, Li Huiru, Lin Liyao, Zhang Junmian, Li Xiao, Wang Ziteng, Liu Caiyi, Wang Wei, David Ball, Jay Birbeck, and Rochelle Beiersdorfer. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.