China's economic growth and fiscal policy will be strengthened next year to improve efficiency

(Reporter Zhao Jianhua) The Central Economic Work Conference held recently determined that stability should be the first word and progress should be made while maintaining stability. China will continue to implement a proactive fiscal policy next year to increase efficiency.

(Economic Observation) China's Fiscal Policy to Stabilize Economic Growth and Improve Efficiency Next Year

China News Agency, Beijing, December 17 (Reporter Zhao Jianhua) The Central Economic Work Conference held recently determined that stability should be the top priority and progress should be made while maintaining stability. Next year, China will continue to implement a proactive fiscal policy to increase efficiency.

At present, the foundation for China's economic recovery is not yet solid. The triple pressure of demand contraction, supply shock, and weakening expectations is still relatively large. The external environment is turbulent and unstable, and stable growth is crucial.

Liu Shangxi, president of the Chinese Academy of Fiscal Sciences, believes that steady growth should be the main task now and next year.

Liu Shangxi said that in terms of short-term emergency, if the economy fails to stabilize, risks in all aspects will arise.

In the long run, development is the top priority, we must focus on economic construction, and take economic challenges as the most important challenges.

In the face of pressure, proactive fiscal policy has contributed a lot in recent years.

To increase efficiency and improve efficiency, China has made the latest considerations for the proactive fiscal policy that will continue to be implemented next year: maintain the necessary fiscal expenditure intensity, optimize the combination of deficits, special bonds, interest discounts and other tools, and ensure fiscal sustainability and local governments while effectively supporting high-quality development. Government debt risks are controllable.

It is necessary to increase the central government's transfer payments to local governments, promote the sinking of financial resources, and do a good job in the "three guarantees" work at the grassroots level.

Luo Zhiheng, chief economist of Yuekai Securities, analyzed the above-mentioned connotation of the proactive fiscal policy, which means that the fiscal expenditure will be greater, and the deficit scale and the sum of special debts will still maintain a certain scale, so as to ensure the intensity of fiscal expenditure and drive the social aggregate. Demand picks up.

In 2022, the main data of China's fiscal expenditure intensity include: the deficit rate is about 2.8%, the national general public budget expenditure has expanded by more than 2 trillion yuan (RMB, the same below) compared with the previous year, and the new local government special bond quota is 3.65 trillion yuan , The central general public budget increased transfer payments to local governments by about 1.5 trillion yuan, and local fiscal expenditures increased by 8.9%.

In the face of pressure, Luo Zhiheng said that "adding strength" and "maintaining the necessary expenditure intensity" are the needs of the current and next year's economic situation, and it is necessary to continue to stabilize growth, employment, and prices through expansionary fiscal policies.

Fiscal expansion, continuous optimization of portfolio deficits, special bonds, interest discounts and other tools.

Li Xuhong, director of the Institute of Fiscal Policy and Application of Beijing National Accounting Institute, said that the prying role of financial tools such as special bonds can be fully utilized to guide market investment confidence and investment demand.

Special bonds are closely related to national strategies.

With the help of special bonds to stimulate investment, it can play a key role in optimizing the economic structure, promote high-quality development, and promote Chinese-style modernization.

For fiscal expansion, it is necessary to ensure the financial resources of various regions.

Li Xuhong said that in recent years, the central government has continuously increased its transfer payments to local governments.

Next year, local financial resources will still need strong support from the central government. It is necessary to ensure that local governments have sufficient financial resources to implement precise policies to protect people's livelihood and promote the recovery of local economies.

Financial expansion, but also to guard against risks.

The Central Economic Work Conference proposed to prevent and resolve the risk of local government debt, resolutely curb the increase and resolve the stock.

In recent years, China has repeatedly emphasized "fiscal sustainability".

Luo Zhiheng said that this is about fiscal space and the fiscal toolbox to deal with future uncertainties, and it is also about the responsibility of the present generation to future generations.

Preventing local government debts is mainly to prevent hidden debts of local governments.

In recent years, tax cuts and fee reductions, the impact of the new crown pneumonia epidemic, and the downturn of the real estate industry have superimposed local debt maturity and interest payment pressures, leading to contradictions in local fiscal revenue and expenditure, and prominent "three guarantees" issues, which have affected the resolution of local government hidden debt schedule.

The increase of transfer payments from the central government to local governments can gradually resolve the pressure on local governments.

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