SCIO briefing on China's fiscal revenue and expenditure in Q1 2024

.

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.