SCIO briefing on China's fiscal and monetary policies

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Liu Wei, vice minister of the Ministry of Finance;
Wang Jianfan, director-general of Tax Policy Department, Ministry of Finance;
Wang Kebing, vice director-general of Budget Department, Ministry of Finance

Xi Yanchun, vice director-general of the Press Bureau, State Council Information Office

July 28, 2017

 Xi Yanchun:

Ladies and gentlemen, good afternoon. Welcome to today's press conference. We are delighted to invite Mr. Liu Wei, vice minister of finance, to introduce China's fiscal and monetary policies and answer some of your questions. Also present are Mr. Wang Jianfan, director-general of the Tax Policy Department of the ministry, and Mr. Wang Kebing, vice director-general of the Budget Department of the ministry.

Now, let's welcome Mr. Liu Wei to provide his briefing.

Liu Wei

Ladies and gentlemen, good afternoon.

In the past six months, the Ministry of Finance has concentrated on supply-side structural reform, and launched a proactive fiscal policy, ensuring China's economic performance would remain stable and would move in a positive direction.

First, Stepped-up efforts to cut taxes and fees.

We continued to ease the corporate tax burden. Measures taken included: implementing and improving the program to replace business tax with VAT in all sectors of society; simplifying the structure of VAT rates; halving corporate income tax for an increasing number of small and micro businesses; providing tax credit policies to more enterprises investing in business start-ups; widening the scope of tax deductions for R&D expenses of high-tech small and medium-sized enterprises.

We also made more efforts to cut fees. Measures taken included: overhauling and exercising standard-based management of administrative fees and government-managed funds; releasing the lists of administrative charges of central and provincial governments on the website of the Ministry of Finance; launching short-term policies to lower premiums for unemployment, reduce logistics and energy consumption costs of enterprises, and reduce business and service fees and charges.

These policies and measures are expected to save enterprises 1 trillion yuan in taxes and fees this year.

Second, Improving management of budget implementation.

Regarding central government's transfer payments to local governments, by the end of June, we had carried out most of the appropriations to local governments, while the remaining funds are for special items, such as payments to those needing settlement by actual spending.

We deepened reforms to introduce a system for the treasury's centralized revenue collection and expenditure payments. Government funds, allocated and transferred in a timely way were also put to better use.

We speeded up the process of making budgetary funds available for fiscal expenditures. In the first half of this year, the growth rate of national fiscal expenditure was six percentage points higher than fiscal revenues. The proportion of budgetary expenditures implemented was 0.7 percentage points higher than the same period last year.

We improved performance-based budget management. Besides the general public budget, some government-managed funds and State capital operations were also placed under closer supervision.

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