SCIO press conference on fiscal reform and development

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Liu Kun, minister of finance

Yu Weiping, vice minister of finance

Xu Hongcai, vice minister of finance


Chen Wenjun, director general of the Press Bureau of the State Council Information Office (SCIO) and spokesperson of the SCIO


Feb. 22, 2022

Chen Wenjun:

Ladies and gentlemen, good morning. Welcome to this press conference held by the State Council Information Office (SCIO). Today, we are delighted to be joined by Mr. Liu Kun, minister of finance, who will introduce China's fiscal reform and development, and answer your questions. Also present at the press conference today are Mr. Yu Weiping and Mr. Xu Hongcai, both vice ministers of finance.

Now, I will give the floor to Mr. Liu.

Liu Kun:

Ladies and gentlemen, friends from the media, good morning. I am glad to meet you ahead of the "two sessions." On behalf of the Ministry of Finance (MOF), I would like to express my heartfelt gratitude to friends from the media for your constant interest and support regarding China's fiscal development. Now, I will introduce the fiscal work in 2021.

2021 was a landmark year in the history of our Party and our country. Faced with complex and severe domestic and international contexts, as well as multiple risks and challenges, the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at its core has rallied and led the Chinese people of all ethnic groups to forge ahead, making major achievements in various undertakings of the Party and the country. The MOF has followed the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and borne in mind the country's most fundamental interests. In accordance with the decisions and plans of the CPC Central Committee and the State Council, we have implemented a proactive fiscal policy, taken solid steps to ensure stability on the six fronts (employment, finance, foreign trade, foreign investment, domestic investment and market expectations) and security in the six areas (residential employment, people's livelihood, market entities, food and energy, stability of industrial and supply chains, and grassroots operations), and worked to achieve new progress in creating a new development dynamic and promoting high-quality development. Revenue in the national general public budget reached 20.25 trillion yuan, an increase of 10.7% over the previous year, and in line with the budget. Expenditure in the national general public budget reached 24.63 trillion yuan, an increase of 0.3% year on year, providing a solid fiscal foundation for a good start to the 14th Five-Year Plan (2021-2025) period.

First, we rolled out stronger policies to sustain steady economic recovery. General Secretary Xi Jinping emphasized that scientific macro control and effective government administration are the intrinsic requirements for exploiting the advantages of the socialist market economy system . In 2021, we enhanced cross-cycle adjustment, strengthened unified management of funds and maintained the necessary scale of government expenditure to ensure major economic indicators stayed within an appropriate range. We issued 3.65 trillion yuan of local government special purpose bonds and adjusted the pace according to economic developments, thus playing an important role in maintaining stable growth and tackling areas of weaknesses. We implemented targeted tax and fee reduction policies and made further tax and fee cuts of about 1.1 trillion yuan to help enterprises overcome difficulties and achieve development. We worked to normalize the straight transfer of funds and expand coverage of the mechanism. Funds totaling 2.8 trillion yuan went straight to primary-level governments, which in turn benefited enterprises and the people. Meanwhile, we implemented the requirement for the Party and government institutions to keep tightening their belts, continued negative growth in central government expenditure, and channeled saved funds to bolster financial support for local governments to improve the people's well-being. We improved the quality, efficiency and sustainability of the proactive fiscal policy to offset downward economic pressure and keep the fundamentals of the overall economy stable.

Second, we supported the development of science and technology and promoted the upgrading and stabilization of industrial and supply chains. General Secretary Xi Jinping emphasized that the essence of the new development dynamic is realizing a high level of self-reliance . The MOF implemented the innovation-driven development strategy. We continued to invest more in science and technology. In 2021, we spent 0.97 trillion yuan on science and technology, an increase of 7.2% over the previous year, to provide strong support for the development of integrated circuits, new energy vehicles, and other industries as well as major breakthroughs in core technologies in key fields. At the same time, we innovated and improved policies and mechanisms. We reformed and optimized the management of research funding allocated by the central government, introduced new preferential tax and fee policies, granted subsidies for small- and medium-sized enterprises (SMEs) with high growth potential, advanced technology and strong market competitive edge, and implemented an open competition mechanism to select the best candidates. These measures are aimed at stimulating the innovation and creativity of researchers and enterprises.

Third, we have increased investment in living standards, and people's sense of fulfillment, happiness, and security have been significantly enhanced. General Secretary Xi Jinping emphasized that the people are the country. As we have fought to establish and consolidate our leadership over the country, we have in fact been fighting to earn and keep the people's support and to ensure them a good life. The MOF has always adhered to the people-centered philosophy of development, coordinated the needs of the people and the possibility of financial resources, and continued to strengthen fundamental well-being for all and ensure there is a cushion in place for those most in need. In 2021, public spending on education stood at 3.76 trillion yuan, up 3.5% over the previous year.

Meanwhile, public expenditure on social security and employment amounted to 3.39 trillion yuan, up 4% over the previous year. Despite enormous public spending in 2020 due to the COVID-19 pandemic, we still ensured high spending on improving people's lives in 2021. Therefore, the scale of expenditure in 2021 was basically the same as that of the previous year, and multiple livelihood policies were effectively implemented.

Fourth, we have promoted the coordinated development of urban and rural areas and further optimized the development pattern. General Secretary Xi Jinping emphasized that coordination is the means, end, and evaluation criterion of development. The MOF firmly followed the new development philosophy and ensured that the transfer payments, fiscal and tax policies, and other instruments were given full play to improve the balance and coordination of urban and rural regional development. In 2021, the central government's transfer payments (including tax rebates) made to local governments topped 8 trillion yuan, with a priority on areas with financial difficulties and underdeveloped regions, so as to enhance the financial guarantee capability for the coordinated development of urban and rural areas. We worked to ensure the effectiveness of major assistance policies and supported consolidating and expanding the country's poverty alleviation achievements and guaranteeing a smooth transition into rural vitalization. In addition, we implemented major national regional strategies such as developing the Yangtze River Economic Belt and the construction of the Guangdong-Hong Kong-Macao Greater Bay Area and promoted coordinated regional development to a higher level and better quality.

Fifth, we have strengthened ecological protection and continue to make our skies bluer, waters clearer, and mountains greener. General Secretary Xi Jinping emphasized that lucid waters and lush mountains are both natural and economic wealth. We must keep in mind that lucid waters and lush mountains are invaluable assets. The MOF resolutely implemented Xi Jinping's Thought on Ecological Civilization, and comprehensively employed policies and measures such as fiscal fund guidance, tax adjustment, and government green procurement to support resource conservation and ecological, environmental protection, and vigorously promoted the transition and economic and social development featuring green and low carbon. In 2021, the national fiscal investment in ecological and environmental protection reached 821 billion yuan. In addition, we introduced an action plan to support the establishment of a horizontal eco-compensation mechanism in the entire Yangtze River Basin, strengthened the role of taxation in regulating the ecological environment protection, and improved government green procurement policies.

Sixth, we have deepened fiscal and tax system reforms and strengthened the supervision of fiscal management. General Secretary Xi Jinping emphasized that good fiscal and taxation systems are the institutional guarantee for improving resources allocation, maintaining market unity, promoting social equity, and realizing enduring peace and stability. Therefore, playing an active and leading role, the MOF has deepened fiscal and taxation reforms speedily and steadily and expedited the building of a modern public finance system. In 2021, we promoted tax legislation such as value-added tax, further deepened the reform of the budget management system, carried out the evaluation of transfer payment and major expenditure policies, promulgated administrative regulations on state-owned assets, and promoted the launch of integrated budget management systems in all provinces. Meanwhile, we carried out special campaigns rectifying violations in four types of activities, including the unlicensed operation of accounting firms, and the supervision of financial management was further strengthened.

Ladies and gentlemen, friends from the media, 2022 is an important year as China enters a new era of building a modern socialist country in an all-round way and strides toward the second centenary goal. The CPC will hold its 20th National Congress, and it is significant to do public finance work well. The MOF will adhere to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, resolutely uphold General Secretary Xi Jinping's core position on the Party Central Committee and in the Party as a whole, and resolutely uphold the Party Central Committee's authority and its centralized, unified leadership. We will also bear in mind the country's most fundamental interests, improve the efficiency of fiscal policies, pay more attention to the precision and sustainability of policies, and exert the role of policies in advance. 

In these ways, we will contribute to sound and sustained economic development and social stability, paving the way for the 20th National Party Congress with actions.

That concludes my introduction. Next, my colleagues and I would like to answer your questions. Thank you all!

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