SCIO press conference on Ministry of Finance implementing major decisions of the 20th CPC National Congress

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Mr. Liu Kun, minister of finance

Mr. Xu Hongcai, vice minister of finance

Mr. Zhu Zhongming, vice minister of finance


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


March 1, 2023

Chen Wenjun:

Ladies and gentlemen, good morning. Today, the State Council Information Office (SCIO) is holding the fifth press conference in the series "Embarking on the New Journey — A Government Perspective." We are honored to have invited Mr. Liu Kun, minister of finance, to brief you on how the Ministry of Finance (MOF) has implemented the major decisions of the 20th National Congress of the Communist Party of China (CPC), and take your questions. Also present at today's press conference are Mr. Xu Hongcai and Mr. Zhu Zhongming, both vice ministers of finance.

Now, I'll give the floor to Mr. Liu Kun for a brief introduction.

Liu Kun:

Ladies and gentlemen, friends, good morning. It's my great pleasure to meet with you face-to-face ahead of the "two sessions." First of all, on behalf of the MOF, I would like to thank friends from the media for your long-term interest in and support for public finance work. I'll take this opportunity to briefly introduce public finance work in 2022.

2022 was an extraordinarily significant year in the history of the CPC and our country. The 20th CPC National Congress was successfully convened, drawing up a grand blueprint for comprehensively building a modern socialist country. The CPC Central Committee with Comrade Xi Jinping at its core rallied and led the Chinese people in rising to challenges, steadily improving development quality, and ensuring overall economic and social stability. At a meeting held by the Political Bureau of the CPC Central Committee on April 29, 2022, General Secretary Xi Jinping emphasized that China should step up macroeconomic policy adjustment, take solid steps to keep economic performance stable, and strive to meet the economic and social development goals set for the whole year. Under the centralized, unified leadership of the CPC Central Committee, the MOF thoroughly implemented the guiding principles of the 20th CPC National Congress, adhered to the general principle of pursuing progress while ensuring stability, fully and faithfully applied the new development philosophy, accelerated efforts to foster a new development pattern, and implemented various fiscal policies early on for the steady recovery and growth of the economy. Revenue in the national general public budget reached 20.37 trillion yuan, an increase of 0.6% over 2021. Expenditure in the national general public budget reached 26.06 trillion yuan, an increase of 6.1%, providing necessary financial support for efficiently coordinating epidemic prevention and control with economic and social development.

First, we stepped up implementation of fiscal policies to maintain stable macroeconomic performance. We promoted the overall planning of financial resources, maintained a necessary level of spending intensity, and increased aggregate domestic demand while keeping a reasonable level of deficit ratio. We maintained the overall deficit ratio within 3% during the past five years to leave ample policy space for meeting new difficulties and challenges. We fully implemented tax and fee policies to support enterprises. Tax and fee reductions, tax refunds and cuts, and fee deferrals introduced last year totaled more than 4.2 trillion yuan, lowering the tax-to-GDP ratio in China from 17% in 2018 to 13.8% in 2022. We accelerated the issue and use of local government special-purpose bonds, and made good use of 502.9 billion yuan in the special bond spare quota in accordance with the law. We implemented robust and effective macro-fiscal control to help maintain stable macroeconomic performance.

Second, we strengthened funding and policy support for primary-level governments to maintain stable fiscal operations. In the past year, we prioritized fiscal operations at county and district levels, strengthened funding and policy support, and did our best to help primary-level governments maintain stable operation. In 2022, central government transfer payments to local governments reached 9.71 trillion yuan, representing a growth of 1.42 trillion yuan, or 17.1%. In the past five years, transfer payments to local governments totaled 40.66 trillion yuan, with an average annual growth rate of 8.4%, providing a strong support for guaranteeing the payment of salaries, normal operation of primary-level governments and the basic wellbeing of the people. We expanded direct allocation to prefecture- and county-level governments, with direct allocated funding increasing from 1.7 trillion yuan in 2020 to around 4.1 trillion yuan last year. On the whole, fiscal operations at county and district levels remained stable, laying a solid foundation for overall economic and social stability.

Third, we pursued innovation to promote the stability of industrial and supply chains. In 2022, national expenditure on science and technology hit 1,002.3 billion yuan, up 3.8% year on year, which guaranteed the capital needed for basic research and making breakthroughs in key and core technologies. Meanwhile, we optimized our policies. We raised the R&D expenses related additional tax deduction rate to 100% for small and medium-sized scientific and technological enterprises. We improved government procurement policies to support innovation. We implemented policies to provide temporary fiscal subsidies for domestic passenger flights. We supported a portion of national comprehensive freight hubs to shore up logistic chains in a bid to increase the tenacity of industrial and supply chains. 

Fourth, we advanced rural revitalization and strengthened the balanced and coordinated development between urban and rural areas and between different regions. Following the new development philosophy, we leveraged the roles of transfer payments and fiscal and tax policies to advance the coordinated development between urban and rural areas and between regions. We provided 40 billion yuan in subsidies for grain planters in three batches and allocated 10 billion yuan from central reserve funds to support drought relief, disaster mitigation, and ensuring autumn harvest. The central government increased the scale of subsidies for rural revitalization. We pushed forward the implementation of major regional strategies and the strategy for coordinated development between regions, increasing transfer payments to old revolutionary base areas, areas with large ethnic minority populations, border areas, and poor areas by 8.2%. 

Fifth, we met basic needs and helped those most in need to improve people's well-being. Upholding a people-centered development philosophy, we met people's needs as much as possible to ensure that public services are inclusive, meet essential needs, and ensure basic living standards for people in difficulty. We ensured expenditure on epidemic prevention and control to reduce the impact on production and daily life. We guaranteed key spending in ensuring people's well-being. The national capital invested in education, social security and employment, public health, as well as addressing air, water and soil pollution and improving rural environment increased by 5.5%, 8.1%, 17.8% and 13.8%, respectively. People's lives have continued to be improved. Since 2017, the national average subsistence allowance standards in urban and rural areas have grown by 39.2% and 62.4%, respectively. The per capita government subsidies for basic health insurance for rural and non-working urban residents increased from 450 yuan to 610 yuan.

Sixth, we deepened the reform of the fiscal and tax system and enhanced the quality and efficiency of governing and supervising finance. The oversight of finance and accounting is an important part of the Party and state oversight system. In our efforts to advance fiscal and tax reforms, we issued guidelines on advancing fiscal system reform at the sub-provincial level and stepped up with integrated budget management. We fulfilled our primary responsibilities in the oversight of finance and accounting and improved the supervision system for fiscal work, focusing on key points in supervision and emphasizing financial disciplines. In doing so, the ability to govern finance was steadily improved.

Ladies and gentlemen, friends from the media, the year 2023 marks the first year of fully implementing the guiding principles of the 20th CPC National Congress. The MOF will take studying and implementing the guiding principles of the 20th CPC National Congress as a primary political task at present and in the coming years. We should acquire a deep understanding of the decisive significance of the establishment of both Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and the guiding role of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and boost our consciousness of the need to maintain political integrity, think in big-picture terms, follow the leadership core, and keep in alignment with the central Party leadership. We should stay confident in the path, the theory, the system, and the culture of socialism with Chinese characteristics. We should firmly uphold Comrade Xi Jinping's core position on the Party Central Committee and in the Party as a whole and uphold the Central Committee's authority and its centralized, unified leadership. We will prevent and control the COVID-19 pandemic and pursue economic and social development in a well-coordinated way, improve the quality of the economy while maintaining a moderate growth rate of GDP, and balance supply-side structural reform and expanding domestic demand. We will align economic policies with other policies and the domestic economic cycle with the international economic cycle and coordinate current and long-term development. Positive fiscal policies with expanded coverage and enhanced efficiency will facilitate the overall improvement of national economic performance to provide strong support for getting this endeavor to build China into a modern socialist country in all respects off to a good start. 

That's all for my introduction. Thank you. 

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