China’s economy will stand firm by 2020

Tax reduction and fee reduction are the main players in the market
One of the strongest policy dividends in 2020.
Since 2020,
7 batches of 28 preferential tax policies have been released one after another.
It is estimated that the new tax cuts and fees will exceed 2.5 trillion yuan throughout the year.

In a pharmaceutical company in the Guangdong-Hong Kong-Macao Greater Bay Area, the fully automatic production line is operating “overtime”. The relevant person in charge Liu Weixin said that the company’s tax cuts and fees for the whole year of 2020 will exceed 80 million yuan. This money is for the recovery of the company. , Is a timely “blood transfusion” in cash flow.

In the Yangtze River Delta, Li Peiming, the head of a foreign-funded enterprise, is busy preparing for the annual financial accounting. The company’s total tax cuts and fees for 2020 will also reach the order of tens of millions. He compared the extraordinary tax and fee reductions in 2020 As “Sending Charcoal in Snow”.

Fiscal policy “takes the lead”,
Tax and fee reduction in 2020 is “unprecedented”!

Liu Shangxi

Liu Shangxi, president of the Chinese Academy of Fiscal Sciences, described the magnitude of tax and fee reductions as “unprecedented”. Tax and fee reductions have become market players and one of the key factors for China’s rapid economic recovery. Looking through the structural features of tax and fee reductions in 2020, fee reductions “play the leading role”, accounting for about two-thirds of the total scale.

Liu Shangxi said that there is a difference between the tax and fee cuts in 2020 and the previous tax and fee cuts. “In the past, tax reductions and fee reductions were mainly based on tax reductions, but in 2020, tax reductions and fee reductions were mainly based on fee reductions. The’fees’ were mainly reflected in the social security payment. It should be said that the sense of acquisition of enterprises is very strong. Our country The reason why a large number of business closures have not occurred under the impact of the unprecedented epidemic is inseparable from the unprecedented tax cuts and fee reductions.”

In a special year, the fiscal policy “takes the lead”, large-scale tax cuts and fee reductions continue to advance, and effectively benefit the people. However, as fiscal revenues have decreased, expenditures have increased unabated. Whether it is a decisive battle to fight poverty or to stabilize employment and protect people’s livelihood, funds are required to “back up”, which is undoubtedly a test for the government’s “pocket”.

Where does the money come from?
The two “1 trillion yuan” are particularly eye-catching!

The fiscal deficit has increased by 1 trillion yuan, and the anti-epidemic special treasury bond issuance is 1 trillion yuan. These two “1 trillion yuan” are also unprecedented. The two new trillion-level fiscal funds are “inserted to the end” in the first place through a special transfer payment mechanism.

Tang Yu, deputy director of the Budget Department of the Chongqing Municipal Finance Bureau, witnessed the innovation of the macro-control method in 2020. “Take Chongqing as an example. It took only 8 days from the Ministry of Finance to our provincial-level budgets to all the distributions to districts and counties.”

 

Liu Yi, Counselor of the State Council and Dean of the Department of Finance of Peking University, just finished his research in many places across the country. She observed from the grass-roots level that the two “1 trillion yuan” had already exerted tangible results in ensuring basic people’s livelihood, stabilizing the employment of residents, and promoting the construction of major projects, stabilizing the “basic disk” of the economy. “These 2 trillion yuan are directly delivered to the grass-roots level of cities and counties through the special transfer payment mechanism of central fiscal funds, directly benefiting enterprises and the people. During the survey, we found that there is generally a very positive feedback from the grassroots financial departments, believing that this 2 trillion yuan Funds help alleviate local financial difficulties, and the operation and support capabilities of the grassroots have been significantly improved.”

Liu Yi said that the government “money bag” in a special year, in addition to increasing revenue, must also cut expenditure. In 2020, the government’s signal for a “tight life” will be stronger, more demanding, and more vigorous. Among them, the central government has taken the lead in living a “tight life”, and the central government has arranged for negative growth in expenditures. Among them, non-urgent and non-rigid expenditures have been reduced by more than 50%.

According to Liu Shangxi, president of the Chinese Academy of Fiscal Sciences, the government is living a “tight life” for the people to live a “good life.” Behind the government’s “tight life” is the emphasis on fiscal expenditure performance. He said that the government’s “tight life” is not just a slogan, it is actually to improve the performance of fiscal capital expenditure by adjusting the expenditure structure. Behind the adjustment of the expenditure structure is actually to force the government to change its functions.

 

Looking forward to 2021, how can the proactive fiscal policy continue to stabilize the “basic market” of China’s economy? Zhang Lianqi, member of the Standing Committee of the National Committee of the Chinese People’s Political Consultative Conference and vice chairman of the China Taxation Society, made his own prediction. “As a traditional structural policy, fiscal policy is responsible for the important task of getting a good start and getting off to a good start during the 14th Five-Year Plan. It is expected that the proactive fiscal policy in 2021 will focus on technological innovation, independent control of the industrial chain and supply chain, and based on domestic demand. The strategic basis points to promote more structural arrangements in consumption and other aspects.”

In 2020, despite the new crown pneumonia epidemic sweeping the world, China’s economy has withstood the stress test and is moving forward steadily through the wind and waves. The year-end special article “China’s Economy Stands Steady 2020”, an inventory of China’s economic “exceptional” 2020.

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