China has taken multi-pronged proactive fiscal measures in the fields of tax and fee cuts, public budget expenditure and bond issuance this year to stabilize the economy and ensure people’s well-being, a senior official has said.
“Tax and fee cuts are key measures to sustain stable macroeconomic performance,” said Vice Minister of Finance Xu Hongcai in an interview with Xinhua, asserting that China is accelerating the implementation of related policies.
Since the beginning of this year, the ministry has introduced over 20 tax support policies, including large-scale value-added tax (VAT) credit refunds and the full refunding of outstanding VAT credits of certain industries, according to Xu.
From April 1 to 28, a total of 625.6 billion yuan (94.53 billion U.S. dollars) of outstanding VAT credits to micro enterprises and newly added credits for other industries were completed, Xu said.
“In May, outstanding VAT credits for small and medium-sized enterprises will be refunded in advance, and tax rebates for large enterprises will also be accelerated later,” Xu said.
Meanwhile, the country has released preferential policies to shore up support for manufacturing and micro and small enterprises. Work is being done to promote early implementation of the policies.
China has introduced measures to suspend the advance VAT payments of aviation and railway transport companies. It has also decided to waive VAT on the income of public transport service providers.
Xu also noted that China has accelerated its public budget expenditure and increased spending in key areas. As of mid-April, 7.24 trillion yuan was spent, up 7.7 percent year on year and accounting for 27.1 percent of the country’s total budget.
The country has effectively guaranteed spending on science and technology, modern agriculture, health, education and other key areas related to people’s livelihoods and regional development.
To guarantee people’s livelihoods, income and government functioning at the local level, China will increase its transfer payments to local governments to around 9.8 trillion yuan this year, up 18 percent from 2021, Xu said, adding that local public budget expenditure will rise 8.9 percent year on year in 2022.
In terms of bound issuance, Xu stressed the role of local government special bonds in shoring up investment and infrastructure construction. China plans to issue 3.65 trillion yuan of these bonds this year to expand investment and stabilize development, he said.
China’s treasury bond market has remained stable despite recent fluctuations in the global treasury bond market, Xu said, noting that mild CPI growth since the beginning of the year, as well as the country’s prudent monetary policy, help stabilize the market.
“The stable operation of the treasury bond market mirrors investors’ confidence in the healthy development of the Chinese economy,” Xu said, adding that “with strong resilience and vitality, the fundamentals of the Chinese economy will remain unchanged.”