(Economic Watch) Tax cuts, bond issuance, and active fiscal policies support China's economy

　　China News Agency, Beijing, April 19 (Reporter Zhao Jianhua) In the first quarter, due to the impact of the epidemic and the changing international situation, China's economic growth rate still reached 4.8%.

The active fiscal policy has been implemented for many years to continue to stabilize the economic market.

　　Li Xuhong, director of the Institute of Fiscal and Taxation Policy and Application of Beijing National Accounting Institute, analyzed that the active fiscal policy to stabilize the economic market can be summarized in two points this year: large-scale tax rebates and tax reductions to reduce the burden on enterprises and stimulate market vitality; rapid issuance of local government special bonds, drive investment.

Data map: Container terminal.

Photo by Zhang Yin

　　Local government special bonds are an important starting point for implementing proactive fiscal policies.

The Central Economic Work Conference will "guarantee the intensity of fiscal expenditure, speed up the progress of expenditure" and "appropriately advance infrastructure investment" as important tasks for this year.

　　This year, China has allocated 3.65 trillion yuan (RMB, the same below) of special bonds for local governments.

In December last year, the Ministry of Finance issued a quota of 1.46 trillion yuan for new local special bonds in 2022 in advance; on March 30, the remaining quota for new special bonds was issued to local governments.

　　This year, the issuance and use of special bonds started early and moved quickly, and the progress was significantly faster than in previous years.

In the first quarter, most of the special bond quotas issued in advance have been issued.

At present, all special bond quotas for project construction have been issued.

According to preliminary statistics, the operating rate of projects supported by special bonds issued this year has reached 75%.

　　The key to proactive fiscal policy is to implement it.

Bai Jingming, a researcher and former vice president of the Chinese Academy of Fiscal Sciences, said that if the special bonds cannot be issued in time, it will not be able to form a physical workload, and it will be difficult to stimulate investment and stimulate the economy.

The central government requires that the quota issued in advance last year should be issued by the end of May, and the quota issued this year should be issued by the end of September.

In the next step, we will promptly release the remaining special debt quota, and give preference to regions with strong solvency and sufficient reserves of projects.

　　Special bonds to stimulate investment have achieved results.

Data released by the National Bureau of Statistics shows that in the first quarter, the national fixed asset investment (excluding farmers) increased by 9.3% year-on-year.

Among them, infrastructure investment increased by 8.5% year-on-year, and manufacturing investment increased by 15.6%.

Bai Jingming said that the growth rate of fixed asset investment exceeded GDP, and the investment growth trend was good.

The investment in the secondary industry increased by 16.1%, which indicates that the real economy is developing steadily and the economy is resilient.

　　While accelerating the issuance of local government special bonds, the combined tax reduction and rebate policy is also exerting force.

Li Xuhong said that since the beginning of the year, China has successively announced a number of policies, through various tax incentives such as tax cuts, tax deferrals, tax exemptions and tax rebates, as well as the joint efforts of multiple tax types such as value-added tax and corporate income tax, to form synergies and reduce The burden of the market entities is to stimulate the vitality of the market.

　　This year, China has implemented both tax cuts and tax rebates.

Continue to implement some of the phased tax reduction and fee reduction policies that expire in 2021, and implement large-scale tax refunds for the value-added tax credits from April 1.

Raise the deduction ratio of R&D expenses for technology-based small and medium-sized enterprises to 100%, and promote enterprises to increase investment in innovation and speed up technological transformation and equipment renewal.

It is estimated that the annual tax rebate will be about 2.5 trillion yuan, of which about 1.5 trillion yuan will be retained.

　　Economic data once again proves that the effect of tax cuts continues to emerge.

Li Xuhong said that in the first quarter, the national investment in high-tech industries increased by 27.0%, of which investment in high-tech manufacturing and high-tech service industries increased by 32.7% and 14.5% respectively.

The investment in manufacturing industries such as electronic and communication equipment, medical equipment and instrumentation has grown rapidly, ranking at the forefront of various industries.

The innovation-driven fiscal and taxation policies have exerted a good policy effect.

(Finish)