This has set the tone for fiscal policy next year and released an important signal.
Active and effective, deficit ratio and special bonds will be stable next year.
Since 2008, China has been adopting a proactive fiscal policy, which is also called an expansionary fiscal policy. There is no doubt that China will continue to implement the proactive fiscal policy, but there are new arrangements for specific work.
"The above-mentioned meeting determined that the main tone of fiscal policy next year is to improve efficiency, be more accurate and sustainable. Last year's formulation was to improve quality, increase efficiency and be more sustainable. Relatively speaking, this year continued to improve efficiency and sustainability, but emphasized accuracy and structure. " Luo Zhiheng, vice president of Guangdong Securities Research Institute, told CBN.
Zhang Jun, chief economist of Morgan Stanley Securities, analyzed CBN, and found that fiscal policy pays more attention to sustainability, which means that there will be no large-scale fiscal stimulus next year. It is estimated that the scale and budget of local government special bonds will be roughly the same as this year, but considering that the local special bonds issued in the second half of this year have not been implemented in specific projects, the actual fiscal funds available next year will be higher than this year.
This year, the national fiscal deficit ratio target is about 3.2%, and the limit of new special bonds for local governments is 3.65 trillion yuan.
"It can be seen from the relevant statements of this meeting that the fiscal policy will not be flooded next year, but it will still maintain a certain expenditure intensity. It is expected that the fiscal deficit ratio will not exceed 3.2% this year, and the scale of special debts may be slightly reduced." Professor Shi Zhengwen from China University of Political Science and Law told CBN.
Luo Zhiheng believes that the biggest change of the Central Economic Work Conference from last year's "maintaining moderate expenditure intensity" to this year's "ensuring fiscal expenditure intensity and accelerating expenditure progress" is from "maintaining" to "ensuring" and removing "moderate", which shows that expenditure intensity is a hard goal and is conducive to enhancing the confidence and expectation of market participants.
"The meeting proposed to ensure the intensity of fiscal expenditure, indicating that the fiscal expansion will be maintained next year, which also reflects the enthusiasm of fiscal policy. However,' guarantee' is not' expansion', so the fiscal stimulus may be roughly the same as this year. " Shi Zhengwen said.
Different from previous years, this year's meeting put special emphasis on accelerating the progress of fiscal expenditure.
"The progress of fiscal expenditure is very important. If expenditure is arranged, but if the progress is slow, it will restrict the effect of policy implementation." Yang Zhiyong, a researcher in national academy of economic strategy, told CBN.
Luo Zhiheng believes that the issuance and use of special bonds this year is lower than in previous years, and the growth rate of infrastructure investment continues to be sluggish. At the same time, the economic pressure in the first half of next year is relatively high. The above statement means that the fiscal policy will be appropriately advanced next year.
Shi Zhengwen said that this year's fiscal expenditure will be delayed, and next year's fiscal expenditure will be accelerated, including continuing to improve the direct mechanism of fiscal funds, expanding the scale of funds, and speeding up the issuance of special bonds.
Not long ago, the State Council has made arrangements to reasonably put forward the special debt quota and allocation plan for next year, strengthen the construction of key areas, and study the issue of some quotas in advance according to the law and procedures. Many analysts believe that the amount of special debt next year is expected to be released in advance, so that local governments can issue bonds early next year to stabilize investment and make up for shortcomings.
There will still be tax reduction and fee reduction next year, with small and micro industries and manufacturing industries as the focus.
In the draft of this meeting, it is rare to mention tax reduction and fee reduction twice. In addition to the above statement, the meeting also pointed out that it is necessary to continue to implement new tax reduction and fee reduction for market players and help them, especially small and medium-sized enterprises and individual industrial and commercial households, to reduce their burdens and help them recover their development.
Feng Qiaobin, deputy secretary-general of China Finance Association, told CBN that next year's tax reduction and fee reduction are highly targeted, that is, mainly for small and medium-sized enterprises, individual industrial and commercial households and manufacturing industries. This shows that the tax reduction and fee reduction policy has structural characteristics, that is, precise policy support is given to enterprises and industries with weak anti-risk ability.
Luo Zhiheng said that the pressure faced by market players next year is greater than this year, and the demand side is facing the decline of real estate and the decline of exports from a high level. It is necessary to introduce new tax reduction policies to improve the ability of market players to resist risks. At the same time, it is necessary to reflect the structural and accurate effectiveness, that is, to strengthen support for small and medium-sized enterprises, individual industrial and commercial households, manufacturing industries, and risk resolution.
According to Shi Zhengwen's analysis, preferential policies including small-scale VAT taxpayers 1% collection rate are expected to continue next year, and the exemption points for small-scale VAT taxpayers and the small and micro income tax relief policies can still be further optimized. We can consider further optimizing the manufacturing value-added tax rebate policy, such as increasing the tax rebate. According to the specific situation, we can consider continuing to introduce the tax reduction policy for manufacturing industry. Considering fiscal sustainability, it is estimated that the scale of tax reduction and fee reduction will be around 1 trillion yuan next year.
Feng Qiaobin believes that next year's tax reduction is mainly to optimize the implementation of existing policies. But the focus should be on reducing fees and improving the business environment.
"Tax reduction should take into account long-term fiscal sustainability and tax system rationality in order to stimulate the enthusiasm of market players and local governments, promote high-quality development and green economy, and promote social equity." Luo Zhiheng said.
Appropriately advance infrastructure construction and curb hidden debts.
This year, the growth of infrastructure investment is sluggish. Statistics from the National Bureau of Statistics show that infrastructure investment (excluding electricity, heat, gas and water production and supply industries) increased by 1% year-on-year in the first month. The meeting emphasized that infrastructure investment should be carried out moderately ahead of schedule.
Feng Qiaobin said that the current economy is facing greater downward pressure, so the meeting emphasized that the economy will be stable next year. Therefore, in this context, the meeting proposed to carry out infrastructure investment in advance. Infrastructure investment will focus on two main lines: digital transformation and green development transformation, especially green development transformation. The meeting talked about energy and resources in a large space, and in the future, investment in energy infrastructure transformation will be strengthened to lay a good foundation for the country's high-quality development.
Luo Zhiheng believes that the main intention of properly advancing infrastructure investment is to stabilize investment, expand effective investment, achieve steady growth, make up for shortcomings, and optimize supply structure. Advancing infrastructure can improve production efficiency. At present, funds should not be invested in areas with overcapacity, but should be invested in new infrastructure, smart cities, underground pipe corridors and other fields to improve the response to sudden extreme natural disasters and improve the management ability of big cities.
Against the background of increasing fiscal revenue and expenditure contradiction, this meeting continued the statement that the party and government organs insisted on living a tight life, and continued to emphasize resolutely curbing the hidden debts of new local governments.
Zhang Jun said that the main purpose of living a tight life and curbing hidden debts is to ask local governments to spend financial funds on projects that can effectively boost the economy and promote employment, and at the same time keep the achievements of cleaning up hidden debts of local governments in the past few years and ensure that hidden debts do not rebound.
"Even in the context of increasing economic downturn and rising real estate and financial risks, we must adhere to fiscal discipline, because finance is the foundation and important pillar of national governance, and finance can hedge economic and social risks, but at the cost of expanding its own risks. In order to stabilize the overall macro situation, it will be normal for the party and government organs to live a tight life for a long time, and it also reflects the people-centered development concept of the party and government departments. " Luo Zhiheng said.