Fiscal focus to be on sci-tech, consumption

2024-01-05 08:24:33China Daily Editor : Li Yan ECNS App Download

Minister: Combination of policy tools will be used to expand expenditure

China will further optimize its fiscal policies, including tax policies, to help further expand and upgrade consumption, and also increase and restructure fiscal support for scientific and technological research and innovations, Minister of Finance Lan Fo'an said in an interview with People's Daily published on Thursday.

Lan also said China will strengthen the overall planning of fiscal resources and use a combination of fiscal policy tools, including Treasury bonds, local government special-purpose bonds, and preferential treatment in taxes, fees and subsidies, to moderately expand the scale of fiscal expenditure this year.

Experts forecast new policy measures are likely to be rolled out in this regard. They further said this will eventually help stabilize economic growth and promote the development of a modern industrial system, thereby promoting high-quality development and strengthening the Chinese modernization drive.

Lan said in the interview that China will maintain an "appropriate level" of higher fiscal expenditure this year to send positive signals to industry and markets. While maintaining stability of the overall government debt ratio, the country will continue to issue an appropriate amount of local government special-purpose bonds, and strengthen the management of the funds raised, thereby helping local governments to strengthen weak links in key areas and improve investment efficiency.

Lan also said China will further optimize and adjust preferential policies related to taxes and fees to provide key support for scientific and technological research, innovations and the development of the manufacturing sector. It will also standardize nontax fiscal revenue collection, and resolutely prevent arbitrary charges and fines.

The minister said the country will focus on residents' needs related to consumption upgrade to study new fiscal and tax policy measures that can improve consumption capacity, optimize consumption environment and promote new types of consumption.

Besides, China will increase fiscal expenditure while improving the expenditure structure in the fields of science and technology, including leaning toward basic research, sci-tech applications and national strategic sci-tech projects, to fully support the pursuit of breakthroughs in core technologies and key areas via an improved national support system.

Wang Qing, chief macroeconomic analyst at Golden Credit Rating International, said that China's moderate inflation levels provide room for it to strengthen policy support to consumption.

"Consumption promotion will be key for China to expand domestic demand this year, and measures like tax reductions, fee cuts and larger-scale consumption subsidies will likely be implemented, especially in key consumption sectors like new energy vehicles, home appliances, furniture, and culture and tourism," Wang said.

"The central government can increase transfer payments to less privileged regions and weak areas to provide targeted consumption support to certain regions."

He said he expects increased fiscal support will be provided to basic research as well as research in sci-tech applications and key national sci-tech tasks. Preferential tax and fee treatment will tilt toward sci-tech innovations, and the country may also provide new fiscal subsidies to science and technology enterprises, he said.

Chang Haizhong, executive director of corporates at Fitch Bohua, a credit ratings agency, said he expects this year's fiscal policies to further encourage and guide expansion and upgrade of consumption in fields like smart homes, entertainment and tourism, through policy tools like fiscal subsidies, tax incentives and government procurement.

The current tourism boom in Harbin of Northeast China's Heilongjiang province is the best example of fostering new types of consumption, he said.

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