The Central Economic Work Conference has made it clear that a more proactive fiscal policy will be implemented in 2025. This is a major decision and deployment made by the Party Central Committee with Comrade Xi Jinping as the core from a strategic and overall height, sizing up the situation, and comprehensively considering the situation, which has pointed out the direction and provided fundamental guidelines for the financial work in 2025. The Ministry of Finance will earnestly unify its thoughts and actions with the scientific judgment of the Party Central Committee on the economic situation, accurately grasp the overall requirements, policy orientation and key tasks of this year's economic work, implement a more proactive fiscal policy, increase counter-cyclical adjustment, continue to exert more force and give greater force to promote economic and social development to maintain a good momentum.

A proactive fiscal policy helped restore economic stability

In 2024, financial departments at all levels will resolutely implement the decisions and deployments of the Party Central Committee and The State Council, implement proactive fiscal policies in a solid manner, intensify efforts to implement stock and incremental fiscal policies, and effectively promote the completion of the annual economic and social development goals and tasks. Last year, national expenditure in the general public budget exceeded 28 trillion yuan, and spending on social security, employment, education and other key areas was effectively guaranteed. We will issue 1 trillion yuan of super long-term special Treasury bonds to support the "double development" and "two new projects." We accelerated the issuance and use of local government special bonds, expanded the areas of investment and used as project capital, and supported more than 40,000 projects. We worked hard to improve people's wellbeing, raised the national minimum for basic pensions for urban and rural residents, and provided one-time living allowances to more than 11 million poor people before National Day. Transfer payments from the central government to local governments continued to exceed 10 trillion yuan, encouraging local governments to reduce their financial resources, and strengthening the work of the "three guarantees" at the grassroots level. We will increase support for local debt, and on the basis of policies such as the 800 billion yuan of new special bonds for five consecutive years, we will arrange a one-time debt ceiling of 6 trillion yuan to replace outstanding hidden debt. According to preliminary statistics, the average cost of debt replacement in all localities has generally been reduced by more than 2 percentage points, freeing up more resources and policy space to support investment, consumption, and scientific and technological innovation. We will deepen reform of the fiscal and taxation systems and oversight of fiscal management, take the lead in piloting zero-base budgeting reform in 16 central government departments, and study the establishment of incentive and restraint mechanisms for transfer payments to promote high-quality development.

We implemented a proactive fiscal policy vigorously and effectively, and worked in concert with monetary and industrial policies to achieve the major development targets for the year. We made solid progress in high-quality development, laid a more solid foundation for stability, strengthened the driving force for progress, and made new solid strides in Chinese-style modernization.

Fully grasp the connotation of more active fiscal policy requirements

The year 2025 is the end of the 14th Five-Year Plan. At present, the adverse impact of changes in the external environment is deepening, and China's economic operation still faces many difficulties and challenges. However, it should be noted that China's economy has strong resilience, full potential and large room for maneuver, and the long-term favorable supporting conditions and basic trend have not changed. We must grasp the general trend, strengthen confidence, take active actions, fully implement the decisions and arrangements of the Party Central Committee, implement a more proactive fiscal policy, continue to exert more force, and play a "combination" of policies, and strive to turn positive factors in all aspects into real achievements in development. Continuous effort is to do a good job of policy convergence, so that the policies that have been issued to maximize the effectiveness of the policy, but also in a timely manner to introduce new powerful policies, back-to-back and continuous force. To be more effective, we need to make full use of policy space, strengthen counter-cyclical regulation, make macro-control more forward-looking, targeted, and effective, and make our policies more forceful and effective, so that all parties have a greater sense of gain.

First, we will increase the deficit ratio and increase the intensity and pace of spending. The deficit-to-GDP ratio is an important vane of macro policy. According to macroeconomic cyclical changes, strengthening counter-cyclical adjustment by increasing the deficit-to-GDP ratio is the common practice of all countries in the world. This year, we will take into account the need for macro-control, raise the deficit to GDP ratio, further increase total government spending, and inject more impetus into economic development. At the same time, the fiscal policy took the initiative to step up efforts to speed up the allocation of funds and form actual expenditures as soon as possible.

Second, we will arrange a larger scale of government bonds to provide more support for steady growth and structural adjustment. From the perspective of international comparison, China's government debt ratio is significantly lower than that of major economies and emerging market countries, and there is still much room for borrowing. This year, we will increase the issuance of ultra-long-term special government bonds to further support the "dual" construction and "two new" work. We will increase the amount of new local government special bonds and expand the areas in which they are invested and used as project capital. We will appropriately increase investment from the central government budget and make appropriate arrangements for investment and priorities.

Third, we will work hard to optimize the structure of spending, strengthen targeted spending, and pay more attention to improving people's lives, boosting consumption, and boosting sustainability. We will continue to tap potential in management, spend money and ask for efficiency, and insist that Party and government organs tighten up their lives without wavering, so as to concentrate financial resources on major and important matters. We will focus on increasing support for ensuring stable employment, and help resolve structural problems in employment and the employment of key groups. We will increase support for boosting consumption, increase personal income, improve the social security system, and improve consumption conditions. We will increase support for education and human resources, scientific and technological breakthroughs, rural revitalization, green and low-carbon areas, enhance policy coordination, and accelerate the development of new quality productive forces.

Fourth, we will continue to vigorously forestall and defuse risks in key areas and promote smooth fiscal operation and sustainable development. Development is the foundation, security is the bottom line, we must strengthen the bottom line thinking, and promote high-quality development and high-level security positive interaction. This year, we will continue to promote the implementation of the policy of replacing outstanding hidden debt with a ceiling on local government debt in accordance with the policy arrangement for liquidated debt. We will allow local governments to use special bonds to recover idle land and purchase existing commercial housing for use as government-subsidized housing to help stabilize the real estate market. Additional special Treasury bonds will be issued to supplement the core tier 1 capital of major state-owned banks and enhance their ability to serve the real economy.

Fifth, we will further increase transfer payments to local governments to strengthen their financial resources and ensure the bottom line of the Three Guarantees. Transfer payments from the central government to local governments have exceeded 10 trillion yuan for two consecutive years, strengthened financial support for the "three guarantees" at the community level, and promoted equal access to basic public services. This year, transfer payments from the central government to local governments will continue to grow, and we will further increase transfer payments for equalization and grants and subsidies from the mechanism for ensuring basic financial resources at the county level to strengthen local financial security. At the same time, we will increase the allocation of incentive funds to promote high-quality development, and encourage local governments to take the initiative to develop the economy and make the "pie" of income bigger.

We will fully implement the fiscal work tasks for 2025

One point of deployment, nine points of implementation. Guided by the Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, we will fully implement the guiding principles of the Central Economic Work Conference, give full play to the role of the government, and ensure that the decisions and arrangements of the CPC Central Committee and The State Council are fully implemented and effective through pragmatic, solid and effective measures. It provides a strong guarantee for completing the goals and tasks of the "14th Five-Year Plan" and achieving a good start of the "15th Five-Year Plan".

We will coordinate consumption and investment to support expansion of domestic demand. We will vigorously boost consumption, give full play to the role of fiscal and tax policies, and carry out special actions to boost consumption. We will step up efforts to ensure people's wellbeing, increase personal income through a variety of channels, and better improve people's lives and consumption. We will increase support for replacing old consumer goods with new ones, expand the coverage of policies, optimize the subsidy application process, and improve the recycling system to leverage more bulk consumption. We will promote the improvement of service consumption and benefit the people, and continue to support the creation of new consumer products, new scenarios and new hotspots. Promote the implementation of the national comprehensive freight hub to strengthen the chain and improve the chain, and reduce the logistics cost of the whole society. We will actively expand effective investment, make good use of all types of government investment funds, properly arrange bond issuance, and promote the creation of more physical work as soon as possible. We will strengthen fiscal and financial coordination, make better use of the multiplier effect and leverage of fiscal funds, and effectively promote more social investment with government investment.

We will promote the development of a modern industrial system and ensure the steady replacement of old driving forces for development. We will work hard to enhance our capacity for scientific and technological innovation, increase central government funding for science and technology, and fully support research in key and core technologies. We will accelerate industrial transformation and upgrading, support the implementation of high-quality development of key industrial chains in the manufacturing industry, strengthen support for new technological transformation of the manufacturing industry, thoroughly implement the policy of awarding and subsidizing specialized and new smes, and organize the third batch of pilot cities for the digital transformation of smes. We strengthened rescue support for enterprises, introduced measures to manage the development of government financing guarantees, and eased the difficulty and high cost of financing for small and micro businesses and other business entities. We will improve the long-term mechanism for regulating fees charged by enterprises, and resolutely prevent arbitrary charges, fines, and apportionment.

We worked hard to ensure and improve people's wellbeing, and helped to solve the people's urgent problems and worries. We will give priority to employment, make good use of policies such as tax cuts and reductions, employment subsidies, and return of jobs to ensure stability, and support college graduates and other key groups in finding jobs and starting businesses. We will support efforts to make education stronger, accelerate quality and balanced development of compulsory education, and increase scholarships for postgraduate studies and state grants for secondary vocational education and regular senior high schools. We will improve the policy system for supporting population development. We will improve the financing mechanism for medical insurance for non-working urban and rural residents, raise government subsidies for medical insurance for non-working urban and rural residents, and promote the development of health services. We will strengthen the social safety net, steadily advance the reform of gradually raising the mandatory retirement age, carry out in-depth national coordination of old-age insurance, and appropriately raise basic pensions for retirees and basic pensions for urban and rural residents.

We will take solid steps to comprehensively revitalize rural areas and promote integrated development between urban and rural areas and between regions. We will support the construction of high-standard farmland and water conservancy infrastructure, coordinate the establishment of cross-provincial compensation mechanisms for grain production and marketing areas, accelerate the revitalization of the seed industry, and ensure a stable supply of grain and important agricultural products. We will continue to consolidate and expand our achievements in poverty alleviation, and increase support for key groups such as those monitored for preventing people from falling back into poverty. We will promote rural development and construction in an orderly manner and vigorously promote a new type of urbanization. We will implement and improve regional fiscal and taxation policies, intensify the implementation of regional strategies, and accelerate the development of old revolutionary base areas, border areas, and resource-depleted areas.

We will actively support efforts to promote ecological progress and work together to reduce carbon emissions and pollution and promote green growth. We will deepen the development of compensation mechanisms for horizontal ecological protection, and study and improve systems for paid use and trading of pollutant discharge rights and management of compensation funds for ecological and environmental damage. We will strengthen ecological protection and restoration, continue to support the battle to protect blue skies, clear waters, and clean land, and the landmark battle of the "Three North" project. We will steadily promote peak carbon neutrality, strengthen support for the research and development, promotion and application of advanced green and low-carbon technologies, promote green and low-carbon transformation in key industries, vigorously support the development of renewable energy, and continue to promote new energy vehicles.

We will vigorously promote scientific financial management and improve the effectiveness of fiscal governance. We will implement the decisions and arrangements made at the Third Plenary Session of the 20th CPC Central Committee on deepening reform of the fiscal and taxation systems, formulate and improve the modern budgetary system, further advance the reform of zero-based budgeting, push forward the collection of consumption tax on some items and assign them to local governments, and optimize the policy of reserving VAT rebates. We will further rationalize the fiscal relations between the central and local governments. We will implement the policy of reducing debt by a basket, accelerate the reform and transformation of local government financing platforms, and effectively guard against and defuse local government debt risks. We will strengthen oversight over finance and accounting, and seriously investigate and punish prominent problems that violate financial discipline.

Source: Chinese government website