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Read in Chinese
Speakers:
Mr. Wang Dongwei, vice minister of finance
Mr. Li Xianzhong, director general of the Department of Treasury of the Ministry of Finance (MOF)
Mr. Wang Jianfan, director general of the Budget Department of the MOF
Chairperson:
Mr. Xie Yingjun, deputy director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO
Date:
April 22, 2024
Xie Yingjun:
Ladies and gentlemen, good afternoon. Welcome to this briefing held by the State Council Information Center (SCIO). This is a regular briefing on China's economic data in the first quarter. Today, we have invited Mr. Wang Dongwei, vice minister of finance, to brief you on China's fiscal revenue and expenditure in the first quarter of 2024, and to take your questions. Also present today are Mr. Li Xianzhong, director general of the Department of Treasury of the Ministry of Finance (MOF), and Mr. Wang Jianfan, director general of the Budget Department of the MOF.
Now, I'll give the floor to Mr. Wang for his introduction.
Wang Dongwei:
Ladies and gentlemen, friends from the media, good afternoon. I'm very glad to meet you again. Thank you for your long-term interest in and support for the fiscal work. First, I will brief you on China's fiscal revenue and expenditure in the first quarter of 2024.
Since the beginning of this year, under the strong leadership of the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core, we have thoroughly implemented the guiding principles of the Central Economic Work Conference and the "two sessions" (National People's Congress and Chinese People's Political Consultative Conference). Following the decisions and deployments outlined in the government work report, we have appropriately enhanced the intensity of our proactive fiscal policy and improved its quality and effectiveness . We have consistently leveraged fiscal policy space effectively, strengthened the coordination of fiscal resources, and improved the policy toolkit and its utilization, promoting sustained economic recovery and growth. In the first quarter, fiscal revenue and expenditure maintained a stable performance, presenting the following three features:
First, fiscal revenue maintained a rebound trend when calculated on a comparable basis. In the first quarter, revenue in the national general public budget reached 6.0877 trillion yuan ($0.84 trillion), marking a year-on-year decline of 2.3%, or comparable growth of 2.2% after adjusting for special factors, maintaining a recovery trajectory. What are the special factors? One is the inflated baseline caused by the entry into treasury of partial tax deferrals for micro, small and medium enterprises in manufacturing during the first few months of 2023. Another is the decline in this year's fiscal revenue as a result of the carryover effect of the four tax reduction policies introduced in mid-2023. In the first quarter, national tax revenue stood at 4.9172 trillion yuan, a year-on-year decrease of 4.9%, yet maintained stable growth after adjusting for the aforementioned special factors.
Second, tax revenue of certain industries such as cultural tourism and advanced manufacturing registered rapid growth. In terms of services, the tax revenue from accommodation and catering, which are closely related to consumer spending, increased by 44.7%, culture, sports and recreation by 26.7%, transportation, storage and postal services by 6.8%, and retail by 5.7%. These figures demonstrate that the vitality of consumer spending is continuously being unleashed. Regarding manufacturing, its tax revenue in the first quarter experienced a year-on-year decline, yet registered stable growth after adjusting for incomparable factors such as the aforementioned inflated baseline. Despite the influence of incomparable factors, the tax revenue of certain subsectors in manufacturing still performed well by showing an upward trend. For example, the tax revenue of railway transportation equipment manufacturing increased by 9.5%, and computer manufacturing increased by 6.8%.
Third, funding for key areas was effectively ensured. Fiscal departments at all levels strengthened coordination of fiscal resources, accelerated budget approval and utilization of additionally issued treasury bonds, and strengthened sufficient funding for major national strategic tasks and efforts to meet people's basic living needs. Meanwhile, we improved the structure of fiscal expenditure, made sure that Party and government departments get used to keeping their belts tightened, spending where necessary and saving where possible, and thus pooling financial resources to accomplish major tasks. In the first quarter, expenditure in the national general public budget increased by 2.9% year on year. Specifically, expenditure on social security and employment was 1.2708 trillion yuan, up by 3.7%; education was 1.0436 trillion yuan, up by 2.5%; urban and rural community development was 561.4 billion yuan, up by 12.1%; agriculture, forestry and water was 518.5 billion yuan, up by 13.1%; and housing support was 204.9 billion yuan, up by 7.8%.
Moving forward, the MOF will make solid efforts to implement the proactive fiscal policy, and strengthen fiscal management and supervision. We will integrate enhancing macro regulation, expanding domestic demand, fostering new growth drivers, and preventing and defusing risks, further improve the quality and effectiveness of the fiscal policy, and consolidate and strengthen the momentum for economic recovery and growth.
That's all for my introduction of the fiscal revenue and expenditure in the first quarter. Now, my colleagues and I are ready to answer your questions. Thank you.
Xie Yingjun:
Thank you, Mr. Wang. Now the floor is open to questions. Please identify the media outlet you work for before asking your question.
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Xinhua News Agency:
As Vice Minister Wang just mentioned, China's fiscal spending expanded by 2.9% in the first quarter, ensuring effective funding for key areas . Could you provide further information on how this budget was allocated? Thank you.
Wang Dongwei:
Thank you for your question. In the first quarter, finance departments at all levels kept their belts tightened and continued to prioritize and ensure funding for key areas, while observing the principle of controlling general expenditures. In the first quarter, China's general public budget spending was nearly 7 trillion yuan (US$985 billion), up by 2.9% compared to the same period last year. This was not easy, especially due to last year's concentrated settlements with pandemic-related expenses. This growth underscores our efforts in enhancing the intensity of our proactive fiscal policy as well as to improve its quality and effectiveness. Here, I'd like to elaborate on how we have achieved this.
First, all funds from additionally issued treasury bonds were allocated at the beginning of the year. An additional one trillion yuan of treasury bonds issued in the fourth quarter of last year were mostly used this year. By the end of February, the Ministry of Finance had already assigned all one-trillion-yuan bonds to local governments. Official data showed that the funds specifically targeting expenditures in urban and rural communities, agriculture, forestry, water conservancy , and disaster prevention and emergency management increased by 12.1%, 13.1% and 53.4% year-over-year, respectively, showing double-digit growth.
Second, over 80% of transfer payments' budget has been issued. For 2024, the central government has planned 10.2 trillion yuan for transfer payments to local governments, a comparable increase of 4.1%. After the National People's Congress approved the central budget for 2024, the Ministry of Finance promptly completed the budget allocation as per the Budget Law .
By early April, all of the central government's budgets for this year were approved with 8.68 trillion yuan of transfer payments being allocated to local governments, accounting for 85.1% of the budget that was set early this year. All projects eligible under general transfer payments and those under shared fiscal powers have been fully funded.
Third, the process of making budgetary funds available for fiscal expenditures has been accelerated. In the first quarter, China's general public budget spending has already completed 24.5% of the total budget, exceeding the average rate for the same period over the past three years. Several sectors registered rapid growth in fiscal spending, including social security and employment, healthcare, urban and rural communities, transportation, and housing. Fiscal spending with social security and employment reached 30.7%, urban and rural communities 26.2%, healthcare 25.1% and transportation 25.1%. All ahead of schedule.
That's all I'm going to say for this question. Thank you.
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China Financial and Economic News:
According to media reports, investors have been actively purchasing savings bond, leading to a situation where some banks are unable to meet demand. How do you view this phenomenon? Thank you.
Wang Dongwei:
My colleage Mr. Li Xianzhong will answer this question.
Li Xianzhong:
Thank you for your question. Savings bonds represent national credibility. They are favored by investors due to their capital preservation and interest protection along with stable returns. The progression of March's and April's issuance of savings bonds was generally stable, but there was, to a certain extent, imbalances between supply and demand. To explain this, it is important to understand that there are different types of savings bonds and different issuance methods. Currently, we have two kinds of savings bonds: certificated bonds and electronic bonds .
Certificated savings bonds are normally available at bank counters. Due to varying customer bases and demands at each branch, there are challenges with adjusting the sales quotas across different branches, which can lead to supply-demand imbalances at some locations. Take the issuance of certificated bonds in March, the Beijing branch of a major commercial bank sold 70% of its total allocation on the first day. Each issuance of treasury bonds would normally last for 10 days. 14 out of 466 outlets in Beijing sold the planned volume within half an hour, causing some investors at the counters to miss out on purchasing bonds.
Electronic savings bonds can be purchased at both bank counters and online via smartphones. And the sales quota can be flexibly adjusted among different channels, either between different banks, different outlets or through online methods. According to statistics, investors over 60 years old, who normally prefer purchasing at bank counters, account for 55% of the total investors of savings bonds. To better meet the needs of this traditional customer segment, the sales quota for electronic savings bonds on the first day are weighted towards counter sales, allocating 60% of the total quota to branch counter sales. This ensures that demand at the counters is generally met.
Since April, the public has paid more attention to savings bonds, which was influenced by factors such as some banks lowering deposit interest rates and suspending sales of large deposit certificates. 99.7% of the planned electronic savings bonds issued in April were sold out on the first day of issuance, which was significantly faster than the average in recent years. At many banks' counters, the bonds were sold over two hours. As the internet or mobile phone platforms could accommodate more investors to buy products simultaneously, these sales were more concentrated, leading to a momentary imbalance between supply and demand of bonds in some banks. Online or on mobile platforms offered by 32 banks, investors had about half an hour on average to purchase savings bonds. The bonds were sold out online or on mobile platforms within a minute at two banks while at seven other banks the record was six minutes.
In order to further meet investors' demand for bond purchases, we will take the following four measures in the next step: First, we will pay close attention to changes in the supply and demand relationship and sales of savings bonds, and study how to appropriately increase the issuance scale. The core of being "hard to purchase bonds for investors" is that demand is strong and supply is relatively insufficient. So, our next step is to appropriately increase the scale of issuance. Second, we will study how to further reduce the limits on individual purchases so that savings bonds can benefit more investors. Third, we will continuously improve the information service of electronic savings bonds on the basis of ensuring over-the-counter sales, and steadily increase the online (mobile phone) sales of electronic savings bonds. At the same time, we will encourage and guide more investors to purchase bonds online or through mobile banking, so as to improve their purchasing experience. Fourth, we will work with relevant departments to further optimize certificate savings bonds' mechanisms for quota allocation to better match branches with actual needs. We will optimize the mid- and long-term arrangements for the issuance ratio of certificate and electronic savings bonds to better meet the needs of investors' demand when purchasing bonds.
That's all for my introduction. Thank you.
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Yicai:
In the fourth quarter of last year, the central government issued additional treasury bonds worth one trillion yuan. Can you give us a detailed explanation to the use and distribution of these additional funds? And what measures has the MOF taken to strengthen capital supervision? Thank you.
Wang Jianfan:
Thank you for your questions. In accordance with the decisions and arrangements of the CPC Central Committee and the State Council, and upon review and approval by the Standing Committee of the National People's Congress, an additional one trillion yuan of treasury bonds were issued in the fourth quarter of 2023, with a focus on supporting post-disaster recovery and reconstruction and making up for shortcomings in disaster prevention, reduction and relief. It is of great importance to comprehensively improve China's resiliency against natural disasters and better protect the safety of people's lives and property in China. The MOF has earnestly implemented and refined a work plan and has completed tasks in a concrete and orderly manner.
First, we have organized the issuance of treasury bonds well. After the Standing Committee of the National People's Congress reviewed and approved the plan for the additional issuance of treasury bonds, the MOF promptly adjusted the treasury bond issuance plan for the fourth quarter, optimized the issuance window and the mix of bond maturities, mobilized members of the treasury bond underwriting group to prepare for debt repayments and ensured a smooth issuance of additional treasury bonds to raise funds fully. With the coordination and cooperation of all relevant parties, the issuance of one trillion yuan of treasury bonds was successfully completed by the end of 2023.
Second, we have worked hard in allocating funds raised by the issuance of treasury bonds. The National Development and Reform Commission (NDRC) and the MOF, along with relevant departments, have established a special working mechanism to organize the application and review of treasury bond projects in a timely manner. According to the project list determined by the special working mechanism, the MOF had allocated all funds raised by the issuance of the additional treasury bond to localities in advance by this February. We have urged and guided local authorities to use these funds for specific units and projects in line with the pace of progress, resulting in practical outcomes as soon as possible.
Third, we have made good arrangements for funds raised from the issuance of additional treasury bonds. The MOF has established a separate allocation mechanism for these funds. In December of last year, we allocated 500 billion yuan of funds to local governments in two batches. From January to February of this year, we allocated another 500 billion yuan of funds to local governments in three batches. In general, all one trillion yuan has been allocated to localities to ensure that projects in various areas could be launched and promoted smoothly.
Fourth, we have established a supervision system for funds raised by treasury bonds. The MOF formulated the "Measures for the Management of Additional Treasury Bond Issuance in 2023" to standardize the allocation and use of funds raised by the government bonds, to improve the integrated budget management system and to conduct full-process supervision over funds. We have urged local regulatory bureaus to set up normalized supervision mechanisms in order to promptly discover and address existing issues. We have prompted local governments to standardize the use of funds and improve their efficiency.
Next, the MOF will actively utilize its functions, guide local governments to accelerate the implementation of projects and continuously enhance our supervision on the issuance of additional treasury bonds, ensuring the precision and efficiency of fund use. Thank you.
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CCTV:
We have noticed that in the first quarter of this year, the central government introduced some policies supporting new drivers of economic growth. Could you please elaborate on the relevant situation and what policy considerations will be taken in the next step? Thank you.
Wang Dongwei:
Thank you for your question. I will answer it. The central government attaches great importance to cultivating new drivers of economic growth and vigorously supports them. I will respond in the following way:
First, we focus on supporting the high-quality development of the manufacturing industry. Centering on vigorously promoting the building of a modernized industrial system and accelerating the development of new quality productive forces, the central government has allocated special funds in the manufacturing sector to make up for weaknesses and strengthen advantages in key technologies and industries and to promote leapfrog development in industries such as new-generation information technology, high-end equipment and new materials. Soon, we will collaborate with departments such as the Ministry of Industry and Information Technology to implement a new round of fiscal support policies for small and medium-sized enterprises with specialized and sophisticated technologies to produce novel and unique products , cultivating more corresponding experts in vital links within the industrial chain. We will pilot new technological transformation in some cities in the manufacturing sector and allocate 3 billion yuan in 2024 to support the "intelligent transformation, digital transformation and networking " of the first batch of around 20 pilot cities, so as to enhance the high-end, intelligent and green standards of the manufacturing industry.
Second, we will focus on promoting the growth of the digital economy. The central government's fiscal support will spotlight key areas of the digital economy, including supporting the construction of digital infrastructure, cultivating industrial internet platforms and promoting the digital transformation of small and medium-sized enterprises, in order to promote the deep integration of the digital economy and the real economy. In the first quarter, the growth rate of the value added of information transmission, software and information technology services reached 13.7%. In 2023, we allocated 3 billion yuan to support 30 pilot cities in carrying out pilot projects for the digital transformation of small and medium-sized enterprises and address the prominent issue of "not daring to transform, unwilling to transform and not knowing how to transform" faced by those enterprises. This year, another 3 billion yuan will be allocated to expand the scope of the pilot. In the next step, we will work with relevant departments to launch the digital transformation and upgrading of transportation infrastructure, supporting the digital transformation of a number of busy national highways, ordinary national roads and high-grade waterways, aiming to promote intelligent expansion, safety efficiency improvements and industrial integration of transportation facilities.
Third, we will focus on expanding and promoting domestic demand. We will make good use of fiscal and tax policies to support the implementation of large-scale equipment renewal and trade-ins of old consumer goods. Centering on the trend of upgrading residents' consumption, we will integrate existing policies with new ones, adhere to the linkage between the central government and local governments, actively promote the trade-in of old durable consumer goods, such as automobiles and household appliances, and cultivate new growth points for consumption. We will support the implementation of county-level actions for commercial construction and the construction of modern commercial and trade logistics systems to improve the level of guarantee for consumption service . Soon, we will work with relevant departments to launch county-level charging and battery swapping facilities to make up for weaknesses and, this year, we will support about 70 pilot counties in 24 provinces to tap the potential of new energy vehicle consumption within rural areas.
Fourth, we will focus on improving the quality and efficiency of infrastructure. We will comprehensively use policy such as additional issuance of treasury bonds, special local government bonds, the central government budget for investment and vehicle purchase tax funds to promote the construction of key fields and major projects. For example, since 2022, a total of 13.7 billion yuan has been allocated to support the implementation of national comprehensive freight hub reinforcement work in two batches of 25 cities, aiming to promote the reduction of comprehensive logistics costs.
Next, we will work with relevant departments to support some large and medium-sized cities in implementing urban renewal actions, including updating and renovating underground pipe networks. At the same time, we will support a new batch of cites to reinforce their functions as national comprehensive freight hubs. These efforts will further improve the shortcomings of infrastructure and better leverage the stimulus effect of government investment.
That's all I have to say. Thank you.
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Bloomberg News:
What is the reason for the slow issuance of local special bonds since the beginning of this year? And when is the issuance expected to speed up? Thank you.
Wang Jianfan:
In order to implement the decisions and deployments of the CPC Central Committee and the State Council, actively play the role of local government bonds, stimulate effective investment and promote steady economic recovery and growth, in December 2023, the MOF performed approval procedures in accordance with the law and approved part of the 2024 quota for local government special bonds in advance.
In 2024, the MOF will work with related departments to continuously improve and adjust the investment areas of local government special bonds and the scope of project capital. We will include more fields of new energy, new infrastructure and new industries for investment in local government special bonds. We will issue bonds to support independent new-type energy storage and the comprehensive treatment of water environments in key river basins; guide local governments to provide more support for areas including infrastructure of national industrial parks, integrated application of 5G technologies, urban village renovation, construction and supply of government-subsidized housing and college dormitories; further plan major projects that deliver significant socio-economic benefits, have a strong driving effect, are wanted by the people, and need to be implemented. We will allow the use of local government special bonds as project capital for government-subsidized housing to help the bonds play their leveraging role. Meanwhile, we will guide local governments to strengthen project reserve, focusing on key investment areas identified by the CPC Central Committee and the State Council, and strictly implement the list of prohibited items. We have worked with related departments to ask local governments to submit their demands for new special bond projects in 2024. Currently, the MOF has been strengthening the review of projects from the aspects of project maturity, balance of financing and revenues, and fund use compliance to improve the quality of project reserves.
In the first quarter of 2024, all localities issued special bonds within the limit of the 2024 quota for local government special bonds approved in advance, mainly for the construction of projects in key areas identified by the CPC Central Committee and the State Council, such as municipal construction, industrial park infrastructure, social programs, transportation infrastructure and government-subsidized housing projects. Special bonds have played a positive role in strengthening the economic foundation, shoring up weak links, improving people's lives and expanding investment. The issuance scale of special bonds in the first four months was smaller than the same period in previous years. This is due to two factors. On one hand, the scale of issuances at the beginning of previous years was expanded to cope with the impact of special factors such as the COVID-19 pandemic. On the other hand, it is also related to demand for local project construction funds, conditions for construction in winter and spring, bond market interest rates and other factors. At the same time, we have also done a lot of work to improve the quality of special bond projects and strengthen the preliminary preparations of projects. Overall, the issuance scale for the whole year is still in line with expectations.
Next, the MOF will work with related departments to guide local governments to issue special bonds at the right pace, optimize the pace and scale of government investment, guide and ensure the funding demand of major projects, use special bonds more efficiently, give full play to the driving and amplifying effect of government investment, consolidate and build momentum for economic recovery and growth, and continue to effectively pursue higher-quality economic growth and appropriately increase economic output. Thank you.
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Guangming Daily:
At present, spring plowing and sowing have entered a critical period. How has the central government's financial support for spring plowing been this year? Are there any new initiatives? Thank you.
Wang Dongwei:
Thank you for your questions. I will answer your questions. Plans for the year begin in spring. Spring plowing is of great significance for stabilizing agricultural production throughout the year, and especially grain production. The central government has strengthened policy implementation, and funds related to agricultural production have been allocated this year to support a good start to agricultural production throughout the year. I would like to share several points with you.
First, we will focus multidimensional efforts on the land to help consolidate the foundation of grain production. There are three main measures: First, we will increase capital investment. We are guiding all localities to make good use of an additional 224.9 billion yuan of treasury bonds issued at the end of 2023 to efficiently advance the cultivation of high-standard cropland, and the redevelopment and upgrading of irrigated areas. Continued support will be provided this year through transfer payment to cultivate modern and high-quality farmland with high and stable yields regardless of drought or floods. Second, subsidies for farming have been increased. The central government's subsidy per mu of high-standard cropland has been increased from 1,300 yuan to 2,400 yuan, and local requirements for supporting funds from major grain-producing counties have been canceled. Third, the scope of support has been expanded. An allocation of 5.2 billion yuan will be used for expanding the conservational tillage area of black soil to 100 million mu. A total of 4 billion yuan has been allocated for expanding pilot programs for comprehensive utilization of saline-alkali land from two provinces to 12 provinces. We should either grow tolerant crops in such land or transform such land for specific crops, so as to expand the space for agricultural production.
Second, we focus on strengthening efforts in technology to support cost reductions and efficiency improvements in agricultural production. There are three main aspects: Firstly, supporting the increase in per unit yields for grain and oil crops across large areas. An allocation of 4 billion yuan will support the implementation of actions to increase the per unit yields of large-scale planters of grain and oil crops and promote the application of technologies such as dense planting and precision seeding to increase production. An allocation of 3.4 billion yuan will support the implementation of actions to grow key crops such as grain and oil crops through an eco-friendly, high-yield, and efficient approach, accelerating the integrated utilization of fertile fields, good seeds, high-quality machines, and useful methods and management systems. Secondly, supporting the revitalization of the seed industry. An allocation of 11 billion yuan will continue to support the seed source related key core technology R&D of key varieties such as corn and soybeans, and be used to carry out integrated pilot projects for the research, development, promotion and application of major varieties, implementing policies such as incentives for counties with significant seed production. Thirdly, supporting the promotion and application of agricultural equipment. This year, an allocation of 24.6 billion yuan will support the subsidization for purchase and application of agricultural machinery and strengthen the implementation of the scrapping and replacement of old agricultural machinery, which is included in the new round of large-scale equipment upgrades that I just mentioned.
Third, we focus on providing support to enhance services and improve the agricultural service system. The main aspects include: Firstly, increasing support for socialized services. An allocation of 8.8 billion yuan will support various regions in providing commercial agricultural services to help solve the problem of "who will farm." Secondly, strengthening the foundation of agricultural talent. An allocation of 5.8 billion yuan will support the implementation of the Shennong elite project, a national program for fostering strategic scientists in agriculture, and the Touyan project that prepares leaders for rural revitalization, as well as programs to develop competent farmers, accelerating the cultivation of agricultural talent adapted to agricultural development. Thirdly, strengthening agricultural credit guarantee services. An allocation of 4.2 billion yuan in fund for rewards and subsidies will offer support for the national agricultural credit guarantee system to innovate and improve products related to grain production, processing and circulation. As of the end of March, there were 1.13 million projects under guarantee, with a balance of 398 billion yuan under guarantee.
Fourth, we focus on creating synergy of policies to improve the grain production income guarantee mechanism. There are four points: Firstly, ensuring the income of grain farmers. An allocation of 185.2 billion yuan will be used to continue subsidies protecting cultivated land fertility, subsidies for corn and soybean producers, and rice-related subsidies, and to increase the minimum purchase price for wheat and early indica rice. We implement policies to reward and subsidize domestic soybean crushing and processing and stabilize soybean planting expectations. Secondly, strengthening support for major grain-producing areas. This year, 57.1 billion yuan has been allocated for incentive funds in major grain-producing counties, achieving 19 consecutive increases. An allocation of 56.2 billion yuan for agricultural insurance premium subsidies will ensure the comprehensive implementation of the policy to insure the full cost and planting income of three major grain crops. Thirdly, fully supporting agricultural disaster prevention, reduction and relief efforts. Carrying out the approach of spraying pesticides, germicides, plant growth regulators and foliar fertilizers to prevent plant diseases, insect pests, and dry-hot wind hazards is very important for wheat production during the spring plowing season. We have allocated 1.6 billion yuan in advance to carry out this work. In the first quarter, more than one billion yuan was allocated to support the efforts in response to the impact of rain, snow, freeze and drought. We strengthened the assessment of crop pest and disease situations and will allocate relevant funds for prevention and control in the near future. Fourthly, improving the diversified input mechanism. We give play to the leverage effect of fiscal funds, innovating investment methods, coordinating with financial policies, and leveraging policy effects.
That is all from me. Thank you.
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Zhinews of Shenzhen Satellite TV:
The scale of government procurement in China is huge and plays an important role in guiding and promoting socio-economic development. What new measures will be taken in government procurement next to promote innovation and establish a modern industrial system? Thank you.
Li Xianzhong:
Thank you for your question. In recent years, the MOF has actively utilized government procurement to support technological innovation, green environmental protection, small and medium-sized enterprises (SMEs) and rural revitalization, assisting in the high-quality development of the economy and society. Next, in accordance with the decisions and deployments of the Party Central Committee and the State Council, the MOF will continuously establish and improve a government procurement policy system that conforms to international rules, focusing on supporting the development of new quality productive forces and constructing a modern industrial system. This year, our work will mainly involve three aspects:
First, we will study and establish a cooperative innovation government procurement system. Cooperative innovation procurement refers to the procurement of innovative products that are not currently available on the market and require research and development, with the procurers starting to get involved as early as in the R&D stage, purchasing R&D services first and then purchasing the newly developed products. We summarized the characteristics of this new procurement method: it not only compensates suppliers for their R&D costs but also places orders in the form of a commitment to purchase a certain amount of innovative products, stimulating corporate innovation vitality through sharing R&D risks and jointly exploring initial markets. This approach is conducive to promoting the integrated management of innovative products from discovering demand and R&D to application and promotion, better supporting the innovation of applied technologies and the transformation of sci-tech achievements. Previously, the MOF did research and drafted the interim regulatory measures for cooperative innovation government procurement, and publicly solicited opinions from all parties. The measures are now ready for issuance and will be released in the near future.
Second, we will continue to improve the policies which support government procurement of green products. In recent years, as part of efforts to promote green transformation and upgrade of the building industry, the MOF has worked with relevant departments to adopt policies which support government procurement of green building materials in order to construct higher-quality buildings. Trials have been launched in various places. This year, based on knowledge gained from these trials, the ministry will expand the scope of policy implementation, with the number of trial cities rising from 48 to 100 and the number of green building material products covered by government procurement standards increasing from 75 to 100. By doing so, we will further intensify our support for promoting green buildings and using green building materials. Meanwhile, the ministry will further deepen and expand policies that support government procurement of other green products, strengthening policies and measures involving compulsory or preferential government procurement of eligible green products. All these will ensure that the government continues to leverage its role as a model and leader in procurement of green products.
Third, we will continue to implement policies involving equal treatment of domestic and foreign enterprises in terms of government procurement. Products made and services provided by both domestic and foreign enterprises in China must be treated on an equal footing during government procurement. This has been our consistent policy. In 2021, the MOF issued a notice on implementing policies involving equal treatment of domestic and foreign enterprises in terms of government procurement , reiterating and stressing this principle. Next, we will enhance regular supervision over procurement staff and agencies, and conduct special rectification focusing on their unequal treatment of domestic and foreign enterprises. We will intensify law enforcement and punish by law those who violate laws and regulations. In addition, we will learn from standard international practices and, after research, set up standards for government procurement of products made in China, aiming to better ensure the implementation of policies involving equal treatment of domestic and foreign enterprises in terms of government procurement.
That's all from me. Thank you.
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National Business Daily:
It was proposed in this year's government work report that starting this year ultra-long special treasury bonds will be issued for the next several years. These bonds will be used to implement major national strategies and build up security capacity in key areas. One trillion yuan of such bonds will be issued in 2024. My questions are: What has the MOF done in regard to ultra-long special treasury bonds? And what is being planned for the next step?
Wang Jianfan:
Thank you for your questions. The issuance of ultra-long special treasury bonds is a major strategic decision made by the CPC Central Committee and the State Council, which is of great importance when it comes to building a great country and achieving national rejuvenation. With examination and approval by the National People's Congress, the MOF has included in the budget for 2024 the revenue and expenditure generated from ultra-long special treasury bonds in 2024. Meanwhile, the preparatory work for ultra-long special treasury bond issuance has made steady progress. The ministry has actively participated in making an action plan to support the implementation of major national strategies and enhance the country's capacities to ensure security in key areas.
For the next step, with a focus on implementation, the MOF will closely coordinate and cooperate with relevant authorities in all work involving ultra-long special treasury bonds.
First, we will promptly issue ultra-long special treasury bonds according to their project allocations. Based on the bond market demand and the implementation timetable of projects supported by ultra-long special treasury bonds, we will scientifically design bond variety and maturity, so that the bond issuance will match the projects' timespan. Meanwhile, we will coordinate the issuance of general treasury bonds and special treasury bonds, ensuring that they are issued at the right pace and satisfying funding needs for projects supported by special treasury bonds.
Second, we will strengthen coordination between central and local government funds, and between existing funds and the increase of funds. With funds raised from the issuance of ultra-long special treasury bonds, they will form a synergy so that their overall effectiveness is enhanced.
Third, we will study and establish supervision mechanisms based on funds raised from the issuance of ultra-long special treasury bonds. We will strengthen supervision over the whole process of fund allocation, distribution and utilization, ensuring the funds are well regulated and used in a safe and efficient way.
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Xie Yingjun:
The last question, please.
Jimu News:
Macroeconomic data shows that the economy has continued to recover and improve in the first quarter of this year. Could you please elaborate on the specific areas where proactive fiscal policies will focus in the next phase to reinforce this positive economic momentum? Thank you.
Wang Dongwei:
Thank you for your question. Let me answer it. This year's government report explicitly states that we should appropriately enhance the intensity of our proactive fiscal policy and improve its quality and effectiveness. By observing the fiscal revenue and expenditure in the first quarter, it is evident that fiscal policy has been proactively deployed efficiently and quickly in order to provide robust support for the continued improvement and recovery of the economy. Moving forward, the MOF will focus on six key areas:
First, we will fully support sci-tech advancements to lead industrial innovation. In line with national strategic requirements, we will increase investments in basic research, applied basic research and cutting-edge research. We aim to accelerate the implementation of major national sci-tech projects, support research on disruptive and frontier technologies and advance the development of critical technologies. We will implement structural tax cuts and fee reductions, focusing on supporting sci-tech and manufacturing innovation. Moreover, we will coordinate the use of special fiscal funds and government investment funds to foster the growth of strategic emerging industries and accelerate the transformation and progression of traditional industries.
Second, we will focus on boosting domestic demand. We will coordinate the effective use of policy instruments such as government bonds, special local government bonds and central budget investments to drive the expansion of effective social investment. Meanwhile, we will implement and refine fiscal and tax support policies, actively promote replacing old durable goods, like cars and home appliances, so as to encourage expanding domestic consumption.
Third, we are committed to actively supporting the improvement and enhancement of the public's welfare and livelihood. In education, our focus is on increasing funding for high school education to meet the financial needs of students. We will promote the high-quality and balanced development of compulsory education, advocate for widespread and enhanced public-interest preschool education and ensure that vocational schools meet fixed standards. We will also push forward the development of world-class universities with Chinese characteristics and superior disciplines. In terms of social security, we will enhance subsidies for basic pension insurance funds, elevate public health service standards, vigorously implement first-rate employment policies and assist people in need. Regarding environmental protection, we will continue to effectively combat pollution. There are two significant points to highlight. First, we have established subsidy funds for the shelterbelt program in northwest, north and northeast China to support key projects in ecosystem restoration and management; second, we have created special funds dedicated to the disposal of electrical waste and electronic products to promote the comprehensive use of resources.
Fourth, we are committed to enhancing food and energy security at a higher level. We will increase incentives for major grain-producing counties, achieving a "19th consecutive increase" in funding to effectively motivate key production areas to prioritize agriculture and grain production. Additionally, we will enhance support for agricultural insurance premium subsidies and expand insurance coverage for major agricultural products. We will actively support efforts to ensure a stable energy supply and price stabilization, promote the sustainable development of renewable energy, encourage an increase in the production of unconventional natural gas and take multiple measures to improve energy security.
Fifth, we will promote coordinated urban and rural regional development. We will implement and improve fiscal and tax policies, vigorously promote new urbanization, support local governments in moving faster to grant permanent urban residency to eligible people who have moved to cities from rural areas, facilitate the implementation of major regional strategies and increase support for special regions such as old revolutionary base areas, ethnic minority regions and border areas.
Sixth, we will strengthen budget execution management and financial operation monitoring. We will direct local authorities and relevant departments to promptly refine allocated budgets into specific projects, enabling rapid release of policy effectiveness and maximizing the benefits of fund utilization. Simultaneously, we will enhance fiscal revenue and expenditure analysis to ensure that at the primary level basic living needs are met, salaries are paid and governments function smoothly. In addition, we will resolutely implement austerity measures for party and government organs, reinforce budget execution constraints and promote the safe and standardized use of fiscal funds.
While focusing on the six aspects outlined above, we will also adhere to the decisions and arrangements of the Party Central Committee and the State Council to better coordinate development and security, to continuously advance the prevention and resolution of local government debt risks, to accelerate the implementation of plans to defuse risks and to promote the reform and transformation of local government financing platforms in a classified manner.
That's all for my response to this question. Thank you.
Xie Yingjun:
Thank you to all of the speakers of your briefings. Thank you to all the journalists for your participation. Today's press conference is now concluded.
Translated and edited by Xu Xiaoxuan, Zhou Jing, Guo Yiming, Ma Yujia, Wang Yanfang, Wang Ziteng, Yuan Fang, Yang Xi, Zhang Junmian, Xiang Bin, Liu Sitong, Li Xiao, Wang Wei, Wang Yiming, Li Huiru, David Ball, and Rochelle Beiersdorfer. In case of any discrepancy between the English and Chinese texts, the Chinese version is deemed to prevail.
