The State Council Press Office held a press conference at 10: 00 am on Thursday, March 21st, 2024, and invited Liu Sushe, deputy director of the National Development and Reform Commission, Liao Min, vice minister of finance, and Xuan Chang, deputy governor of the People’s Bank of China, to introduce recent investment, finance and financial related data and policies, and to answer reporters’ questions.
The picture shows the press conference. (photo by Liu Jian)
Shou Xiaoli, deputy director and spokesperson of the State Council Information Office:
Good morning, ladies and gentlemen. Welcome to the press conference of the State Council Information Office. Today, we are very pleased to invite Mr. Liu Sushe, deputy director of the National Development and Reform Commission, Mr. Liao Min, vice minister of finance, and Mr. Xuan Changneng, deputy governor of the People’s Bank of China, and ask them to introduce the recent investment, finance and financial related data and policies and answer your concerns.
Now, first of all, please let Mr. Liu Sushe make an introduction.
Liu Sushe, Deputy Director of the National Development and Reform Commission:
Good morning, journalists and friends! I am very happy to attend today’s press conference. I would like to take this opportunity to thank journalists and friends for their concern and support for development and reform.
The picture shows Liu Sushe, deputy director of the National Development and Reform Commission. (photo by Xu Xiang)
Let me first introduce the recent investment situation. Since the beginning of this year, the National Development and Reform Commission, together with relevant parties, has conscientiously implemented the deployment of the Central Economic Work Conference and the Government Work Report, given full play to the driving amplification effect of government investment, actively supported social capital to participate in major project construction, and made efforts to expand effective investment. From January to February, the national fixed asset investment increased by 4.2% year-on-year, and the growth rate was 1.2 percentage points faster than last year. After deducting the investment in real estate development, the overall investment increased by 8.9%, achieving a smooth start. Mainly presents the following highlights:
First, the growth rate of manufacturing investment has accelerated. From January to February, the investment in manufacturing industry increased by 9.4%, 2.9 percentage points faster than last year and 5.2 percentage points higher than the total investment. The investment in technological transformation of manufacturing industry increased by 15.1%, and the growth rate was 5.7 percentage points higher than that of all manufacturing investment.
Second, the growth momentum of new kinetic energy investment is good. From January to February, investment in high-tech industries increased by 9.4%, including investment in high-tech manufacturing by 10% and investment in high-tech service by 7.8%. Among them, the investment in electronic and communication equipment manufacturing increased by 11.6%, and the investment in aviation, spacecraft and equipment manufacturing increased by 33.1%.
Third, the proportion of private investment in the overall investment has rebounded. From January to February, private investment accounted for 52.6% of the total investment, 2.2 percentage points higher than last year. Private investment increased by 0.4%, reversing the negative growth since the first five months of last year; Among them, private investment in manufacturing and infrastructure increased by 11.6% and 7.9% respectively.
Fourth, infrastructure investment has played an effective supporting role. From January to February, infrastructure investment increased by 6.3%, 0.4 percentage points faster than last year. Among them, the investment in water conservancy management increased by 13.7%, the investment in railway and road transportation increased by 27% and 8.3% respectively, and the policy benefits such as issuing additional national debt in 2023 are gradually emerging.
In the next step, the National Development and Reform Commission will make good use of policy tools such as investment in the central budget, ultra-long-term special government bonds and special bonds of local governments, speed up the review of special bond projects of local governments, and give full play to the guiding role of government investment; Implement a new mechanism of cooperation between government and social capital to mobilize the enthusiasm of private investment; Promote scientific and technological innovation and the development of emerging industries, accelerate the new urbanization based on people, and expand the space for effective investment in many ways; We will promote steady growth of investment and continuous optimization of the structure throughout the year, give full play to the key role of investment in optimizing the supply structure, and promote sustained economic recovery and long-term improvement. thank you
Shou Xiaoli:
Thank you, Deputy Director Liu Sushe, for your introduction. Next, please introduce Mr. Liao Min.
Vice Minister of Finance Liao Min:
Good morning, ladies and gentlemen, friends from old and new journalists. I am very happy to attend today’s press conference and take this opportunity to thank you for your long-term support and concern for financial work. Below, I will inform you about the financial operation from January to February from two aspects: revenue and expenditure. Generally speaking, the income continues to grow, while the expenditure is ahead.
The picture shows Vice Minister of Finance Liao Min. (photo by Xu Xiang)
First, the fiscal revenue continued to recover and started smoothly. From January to February this year, the national general public budget revenue was 4.46 trillion yuan, down 2.3% year-on-year, but it actually increased by about 2.5% according to comparable caliber. Let me explain here. You may have noticed that due to the measures taken to deal with the epidemic, in recent years, when comparing the economic data, the situation is often more complicated. In recent years, the fiscal revenue has also fluctuated greatly, which is mainly related to some measures and policies adopted by us to reduce taxes and fees in response to the epidemic. Therefore, according to the international common practice, some special and incomparable factors need to be deducted when making the year-on-year comparison, so as to reflect the trend change more objectively and truly.
Judging from the situation in January and February this year, the year-on-year decline in income was mainly disturbed by two special factors. On the one hand, the base has been raised. For example, in 2022, some small and medium-sized enterprises in manufacturing were put into storage in the first few months of 2023, which raised the income base in 2023. On the other hand, the tax reduction policy introduced in the middle of last year has an impact on this year’s revenue reduction. For example, in August 2023, the stamp duty on securities transactions was halved, which will make the low tax rate implemented in the first eight months of this year correspond to the relatively high tax rate in the same period last year. Another example is that in mid-2023, the policy of adding and deducting the value-added tax of advanced manufacturing enterprises and increasing the pre-tax deduction ratio of R&D expenses of enterprises in some industries also belongs to this situation. This has lowered the tax increase in January and February this year. Therefore, after deducting the above-mentioned special factors, the national general public budget revenue increased by about 2.5% in January and February under comparable caliber. In fact, it has achieved a recovery growth, which is basically consistent with the steady and positive trend of the macro economy.
Second, the fiscal expenditure is reflected in the front, and the progress is accelerated. From January to February, the national general public budget expenditure increased by 6.7% year-on-year, accounting for 15.3% of the annual budget. The expenditure progress was the fastest in the same period of the past five years, among which the expenditure in social security and employment, education, urban and rural communities, agriculture, forestry, water and transportation increased rapidly, and the expenditure on key projects was effectively guaranteed. Fiscal expenditure has both aggregate effect and structural effect, so we believe it will play a positive role in promoting macroeconomic recovery, promoting economic restructuring and promoting social capital investment.
In the next step, the Ministry of Finance will implement the spirit of the Central Economic Work Conference and the National "Two Sessions", implement a proactive fiscal policy, combine fiscal policy tools such as deficit, special debt, extra-long special national debt and tax incentives, and at the same time strengthen coordination with policies such as currency, employment, industry, region, science and technology, and environmental protection, so as to ensure concerted efforts and joint efforts, and promote the effective improvement of quality and reasonable growth of the economy.
Looking forward to the whole year, I believe that with the further amplification of the combined effects of various policies, it will not only consolidate and enhance the positive trend of macroeconomic recovery in the current period, but also promote the supply-side structural reform, technological progress and the development of new quality productivity, which will also help China’s economy maintain a medium-and long-term growth trend and build a solid foundation for fiscal sustainability. Thank you.
Shou Xiaoli:
Thank you, Vice Minister Liao Min, for your introduction. Next, please let Mr. Xuan Changneng make an introduction.
Xuan Changneng, Vice Governor of China People’s Bank:
Hello, media friends! Thank you for your long-term concern and support for the financial sector. Since the beginning of this year, the People’s Bank of China has stepped up macro-policy regulation and control, and the prudent monetary policy is flexible, moderate, accurate and effective, focusing on expanding domestic demand, boosting confidence and creating a suitable monetary and financial environment for economic recovery.
The picture shows Xuan Changneng, deputy governor of China People’s Bank. (photo by Xu Xiang)
In terms of the total amount, we will maintain a reasonable growth and steady pace of money, credit and financing. While flexibly manipulating the medium-term loan facility (MLF) and open market operation, the RRR was lowered by 0.5 percentage points in the beginning of the year, and the long-term liquidity was released at one time, exceeding 1 trillion yuan, which fully guaranteed the liquidity supply in terms of quantity. At the same time, pay attention to guiding financial institutions to strengthen the balanced loan supply, prevent credit fluctuations from increasing and "opening the door" excessively, and provide stable and sustainable financial support for the economy.
Structurally, continuously optimize the credit structure and pay attention to improving efficiency. Scientific and technological innovation, advanced manufacturing, and green development are all important areas that reflect high-quality development. The People’s Bank of China continues to implement refinancing to support carbon emission reduction. The 500 billion yuan mortgage supplementary loan (PSL) newly added in December last year has also been fully distributed, and scientific and technological innovation and technological transformation refinancing will be set up to continuously improve the efficiency of promoting economic restructuring, transformation and upgrading, and conversion of old and new kinetic energy, and do a good job in the "five major articles" of finance. At the same time, increase efforts to revitalize existing financial resources, promote effective investment, and help resolve excess capacity.
In terms of price, the cost of comprehensive social financing will be steadily reduced and the RMB exchange rate will be kept stable. Faced with the constraints of domestic bank deposit and loan spreads and domestic and foreign spreads, the People’s Bank of China has continued to show the effect of reducing costs through policy mix. Guided by the previous policies of lowering the deposit interest rate, and lowering the interest rate of re-lending and re-discounting to support agriculture, the quoted interest rate (LPR) of loans over five years in February dropped by 0.25 percentage points, the largest decline since the LPR reform, effectively driving the continuous decline of loan interest rates. At the same time, it not only insists that the market plays a decisive role in the formation of the exchange rate, but also plays a good role in the adjustment of the exchange rate to the macro-economy and the international balance of payments, and strengthens the expected guidance to prevent the risk of exchange rate overshoot, thus maintaining the basic stability of the RMB exchange rate under the complicated situation.
The monetary policy has achieved remarkable results, and the quality and efficiency of financial support for the real economy have continued to improve. There are several aspects: first, the total amount has increased reasonably. At the end of February, M2, social financing scale and RMB loans maintained rapid growth of 8.7%, 9.0% and 10.1% respectively, which was in line with market expectations. Second, the support for the "five big articles" has increased. At the end of February, small and micro loans of Pratt & Whitney increased by 23.1% year-on-year, medium and long-term loans of manufacturing industry and high-tech manufacturing industry increased by 28.3% and 26.5% year-on-year, respectively, and financial resources flowed more to key areas such as high-quality development. Third, the financing cost is reduced and the exchange rate is stable. In February, the weighted average interest rate of corporate loans was 3.72%, down by 0.13 percentage points year-on-year. Since February, the exchange rate of RMB against the US dollar has been stable around 7.2 yuan, taking into account the internal and external balance.
China’s monetary policy has sufficient policy space and abundant tool reserves, and the statutory deposit reserve ratio still has room for decline. The downward deposit cost and the shift of monetary policy in major economies are conducive to broadening the autonomy of interest rate policy operation, and the establishment of scientific and technological innovation and technological transformation refinancing will help accelerate the development of high-end manufacturing and digital economy. In the next stage, a prudent monetary policy will continue to be flexible, moderate, accurate and effective, reasonably grasp the relationship between bonds and credit, maintain reasonable and abundant liquidity, promote the steady decline of corporate financing and residents’ credit costs, continue to do a good job in the "five major articles", intensify efforts to revitalize existing financial resources, maintain the basic stability of RMB exchange rate at a reasonable and balanced level, and balance the relationship between short-term and long-term, steady growth and risk prevention, internal balance and external balance. Thank you!
Shou Xiaoli:
Thank you, Vice President Xuan Changneng, for your introduction. Let’s start asking questions. Please inform your news organization before asking questions.
21st century business herald reporter:
Last year, China issued another 1 trillion yuan of national debt. What is the current progress? This year’s "Government Work Report" proposes to issue ultra-long-term special government bonds. As the competent investment department, how will the National Development and Reform Commission promote related work and improve the efficiency of government investment? Thank you.
Liu Sushe:
Thank you for your question. I want to answer it from three aspects.
First, about the issuance of government bonds in 2023. As we all know, last year, 1 trillion yuan of treasury bonds were issued to specifically support post-disaster recovery and reconstruction in North China, focusing on Beijing, Tianjin and Hebei, and to enhance disaster prevention, mitigation and relief capabilities. In order to do this work well, the National Development and Reform Commission, in accordance with the deployment of the CPC Central Committee and the State Council, quickly established a working mechanism with relevant departments to organize and promote project screening, factor guarantee, construction and other work. By February this year, the Development and Reform Commission had issued a list of 1 trillion yuan of additional treasury bonds in three batches, and all the funds for additional treasury bonds had been implemented to 15,000 specific projects.
From the perspective of support, more than half of the 1 trillion yuan of additional national debt is used for the construction of related water conservancy facilities such as flood control and drainage, more than 200 billion yuan is used for post-disaster reconstruction in Beijing, Tianjin and Hebei, and the rest is mainly used for the improvement of natural disaster emergency response capacity and the construction of comprehensive prevention and control systems such as forest fires. Project construction in these areas will effectively restore and improve the production and living conditions in disaster areas, significantly enhance the ability to prevent and respond to natural disasters, and objectively promote the steady growth of infrastructure investment.
Judging from the project progress. At present, the Development and Reform Commission has established a scheduling mechanism for the issuance of treasury bonds, and has begun to comprehensively schedule the progress of the projects. Judging from the current situation, the construction of related projects is progressing in an orderly manner. For example, the project operating rates in Beijing and Hebei Province have reached 48% and 45% respectively. We will urge local governments to speed up the work progress, carry out on-the-spot supervision with relevant departments, push all these projects to start in the first half of this year, and form more physical workload during the year. In particular, we will urge some post-disaster reconstruction projects to be completed and put into use before the flood season this year, so as to truly turn all projects into popular projects, high-quality projects and clean projects.
The second aspect is about ultra-long-term special national debt.
The "Government Work Report" proposes that from this year, it is planned to issue ultra-long-term special government bonds for several consecutive years, specifically for the implementation of major national strategies and the construction of security capabilities in key areas. In accordance with the decision-making arrangements of the CPC Central Committee and the State Council, the Development and Reform Commission, together with relevant departments, will study and formulate specific plans, refine and improve support areas, and further clarify work requirements. The overall consideration is to coordinate "hard investment" and "soft construction", concentrate on solving some major problems in the process of building a strong country and national rejuvenation, and lay a solid foundation for realizing the goal of the second century as scheduled.
In the next step, the Development and Reform Commission will quickly organize and implement the plan together with relevant parties after it is approved by the CPC Central Committee and the State Council. On the one hand, focus on key areas such as scientific and technological innovation, urban-rural integration development, regional coordinated development, food and energy resources security, and high-quality population development, organize project planning and storage, preliminary work and construction implementation, and support a number of high-quality projects. On the other hand, we will promptly promote the introduction and implementation of relevant supporting policies and measures, break down deep-seated obstacles through institutional and institutional reforms, and form synergies with major project construction to ensure the high-quality landing of various tasks.
The third aspect is about improving the efficiency of government investment.
The Central Economic Work Conference proposed that to expand effective investment, in addition to the 1 trillion yuan of treasury bonds issued last year, 1 trillion yuan of ultra-long-term special treasury bonds this year, 700 billion yuan of investment in the central budget this year, and 3.9 trillion yuan of local government special bonds, the total scale of these funds exceeds 6 trillion yuan. Therefore, improving the efficiency of government investment and giving full play to the leading role of government investment in the whole society is a key and key point of investment work this year.
We consider that we should focus on the following aspects this year: First, do a good job in the preliminary work. Urge relevant parties to strengthen the project reserve, strengthen the preliminary demonstration such as feasibility study, and improve the scientific nature of investment decision. At the same time, coordinate and increase the protection of land use, environmental impact assessment and other factors, and actively implement supporting financing. The second is to optimize the investment field. Adjust and optimize the investment structure in the central budget, appropriately expand the scope of local government special bonds and use them as capital, and at the same time strengthen the overall connection and dislocation arrangement of various government investments to form the overall synergy of various funds. The third is to strengthen the whole chain management. We will further improve various regulations, build a management mechanism covering the whole cycle and chain of government investment projects, such as planning and reserve, preliminary work, investment decision-making, construction and operation, supervision and inspection, and promote the improvement of investment benefits with refined management. Thank you.
Economic Daily reporter:
Excuse me, what are the main areas of new credit in the first two months of 2024? What are the highlights? Thank you.
Xuan Changneng:
Thank you for your question. Since the beginning of this year, the People’s Bank of China has given full play to the dual functions of monetary policy tools, and guided financial institutions to increase their support for key areas and weak links of the national economy, such as inclusive finance, scientific and technological innovation, manufacturing, infrastructure and privatization, on the basis of strengthening credit support for the real economy.
In terms of the total amount, the total amount of credit continued to maintain steady and rapid growth. At the end of February, the balance of RMB loans of financial institutions was 243.96 trillion yuan, a year-on-year increase of 10.1%. In the first two months, new loans amounted to 6.37 trillion yuan.
From the structural point of view, the credit structure has been continuously optimized. There are the following highlights:
First, credit growth in key industries of the national economy remained high. At the end of February, the balance of medium and long-term loans in manufacturing industry increased by 28.3% year-on-year. As mentioned earlier, the balance of medium and long-term loans in high-tech manufacturing industry increased by 26.5% year-on-year. Medium-and long-term loans in infrastructure industry increased by 14.0% year-on-year, and the balance of loans for high-tech, "specialized and innovative" and small and medium-sized science and technology enterprises increased by 14.2%, 18.5% and 21.4% respectively, which were significantly higher than the growth rate of various loans by 10.1% in the same period, and the proportion of loans further increased.
Second, more financial resources flow to the weak links of the national economy. At the end of February, the balance of Pratt & Whitney small and micro loans increased by 23.1% year-on-year; In the first two months, it increased by 1 trillion yuan, an increase of 110.2 billion yuan. At the end of February, the balance of full-caliber agriculture-related loans increased by 14.5% year-on-year, 4.4 percentage points higher than the growth rate of various loans in the same period; In the first two months, it increased by 2.53 trillion yuan, an increase of 170.8 billion yuan. Loans from the private economy are on the increase. At the end of February, the balance of private economy loans increased by 11.6% year-on-year, 1.5 percentage points higher than the growth rate of various loans in the same period.
Thank you!
Nanfang Daily Southern+Reporter:
According to the Government Work Report, deficit ratio plans to make arrangements according to 3%, and "the proactive fiscal policy should be moderately strengthened, improving quality and increasing efficiency". Please tell us about the specific deployment of moderate fiscal policy. How do these measures affect the overall financial debt burden? Thank you.
Liao Min:
Thank you for your question. Your question is actually how to look at the balance between fiscal policy supporting economic growth and maintaining the sustainability of fiscal operation.
Macro-control requires the organic combination and joint action of various tools. From the perspective of fiscal policy, this year is to implement the work requirements of "moderately increasing strength, improving quality and increasing efficiency" put forward by the Central Economic Work Conference and the National People’s Congress. What you care about is the moderate strength, which is not only reflected in the deficit policy, but also includes various policy tools such as special debt, ultra-long-term special national debt, and tax and fee concessions.
This year, according to the arrangement of 3%, the deficit in deficit ratio is 4.06 trillion yuan, which is 180 billion yuan higher than the budget at the beginning of last year. By coordinating all kinds of financial resources, the fiscal expenditure has reached 28.5 trillion yuan, which is 1.1 trillion yuan higher than last year, maintaining a high expenditure intensity. Considering that 1 trillion yuan of treasury bonds were issued in the fourth quarter of last year, most of them were used this year. In fact, the expenditure effect will be more reflected in this year. In addition, this year, 3.9 trillion yuan of local government special bonds will be arranged, an increase of 100 billion yuan over last year, and 1 trillion yuan of ultra-long-term special government bonds will be arranged. Together with the implementation of structural tax reduction and fee reduction policies, all these policies will provide necessary and strong support for achieving this year’s economic and social development goals.
I am very happy to tell you a new situation. Recently, we learned that you are very concerned about the bond issuance of the China government. According to the overall financial plan, these government bonds are being issued one after another. Here, we can see that China government bonds have been widely welcomed in the market. In the past few months, overseas investors have increased their holdings for several months, making them one of the best performing government bonds in Asia.
Of course, while supporting economic growth, you were just concerned about financial sustainability. The financial department has always insisted on coordinating steady growth and risk prevention, coordinating needs and possibilities, scientifically and rationally arranging deficit levels and government debt levels, and ensuring medium-and long-term fiscal sustainability. In the past few years, even during the epidemic, our deficit ratio has remained relatively stable, which is a prominent feature among major economies. From 2018 to 2023, the overall fiscal deficit ratio will be controlled within 3%. In 2024, deficit ratio will be arranged at 3%, which is also determined by comprehensive consideration of various factors. Generally speaking, we believe that the level of government debt in China is moderate, which not only meets the objective needs of promoting economic stability, but also helps to achieve medium-and long-term fiscal sustainability.
Thank you all.
CCTV reporter from the Central Radio and Television General Station:
In recent years, China has continuously increased investment in social and people’s livelihood to enhance people’s well-being. What work have we focused on in the field of social and people’s livelihood? How to promote the filling of shortcomings and weaknesses in the field of social and people’s livelihood and further enhance people’s livelihood security? Thank you.
Liu Sushe:
I’ll answer this question. People’s livelihood is the foundation of our party’s governance, the foundation of people’s happiness and the source of social harmony. The National Development and Reform Commission has implemented the decision-making arrangements of the CPC Central Committee and the State Council, worked with relevant departments to formulate and dynamically adjust the national basic public service standards. Since the Tenth Five-Year Plan, it has arranged a total investment of 219.6 billion yuan in the central budget to strengthen infrastructure construction in the fields of education, health care, employment, cultural tourism, social services, national fitness, and "one old and one small", and strived to fill the shortcomings and weaknesses in the social field. I introduce it from several aspects:
The first is to strengthen the construction of educational infrastructure. Mainly to improve the conditions of compulsory education schools and expand the supply of basic education degrees. Support vocational colleges and application-oriented undergraduate colleges to build production-education integration training bases. At the same time, we will continue to improve the running ability of central universities, universities in the central and western regions, high-quality medical and normal universities, and strengthen connotative development.
The second is to build a high-quality and efficient medical and health service system. Focus on the problem that it is difficult and expensive for people to see a doctor, actively support the high-quality development of public hospitals, strengthen health services for women and children, and promote the inheritance and innovation of Chinese medicine. Build a number of national regional medical centers to promote the expansion of high-quality medical resources and regional balanced layout. Actively and steadily promote the construction of "emergency and emergency" public infrastructure and build a strong public health system.
The third is to support the development of social services and national fitness. Continue to promote the construction of service facilities for social welfare, disabled people and retired military personnel, and fill in the shortcomings of funeral facilities. Support the construction of sports parks and social football venues, and improve the facilities and conditions of national fitness venues.
The fourth is to improve the service ability of "one old and one small". We will speed up the construction of an old-age care service system that is coordinated with community organizations at home and combines medical care with health care. We have issued the Opinions on Developing a Silver-haired Economy to Improve the Well-being of the Elderly, which has promoted the development and growth of the care service system, and carried out pilot projects for the construction of comprehensive care service centers in some cities.
The fifth is to continuously improve people’s quality of life. It issued the protection plan for the construction of the Yellow River National Cultural Park, promoted the construction of the Grand Canal National Cultural Park, and supported the construction of cultural heritage protection projects such as Sanxingdui and Luoyang City in Han and Wei Dynasties. The "Implementation Plan for the Construction of Embedded Service Facilities in Urban Communities" was issued to promote the extension of "one old and one small" inclusive services to the community.
At present, there are still many shortcomings and weaknesses in the field of people’s livelihood, which is far from the expectations of society and the needs of the people. In the next step, in accordance with the decision-making arrangements of the CPC Central Committee and the State Council, we will persist in safeguarding and improving people’s livelihood in development, constantly improve the public service system and improve people’s quality of life. The key point is to work with relevant departments to guide all localities to implement the 2023 version of the national basic public service standards, persist in doing their best and do what they can, and firmly grasp the basic bottom line of people’s livelihood. At the same time, we will continue to increase investment in people’s livelihood, give full play to the guiding and inciting role of investment in the central budget, make good use of other funding channels, actively promote the shortcomings, strengths and weaknesses and quality improvement of key people’s livelihood areas, promote the improvement of social livelihood policies, and adopt more measures to benefit people’s livelihood and warm people’s hearts, and continuously enhance the people’s sense of acquisition, happiness and security. Thank you.
The Paper reporter:
In the first two months of this year, China’s private investment turned from negative to positive. How do you view the current development trend of private investment and what measures will be taken in the next stage to further stimulate private investment? Thank you.
Liu Sushe:
Private investment is a very important foundation for the development of private economy, and it is also a "barometer" of the activity of private economy. The National Development and Reform Commission has implemented the decision-making arrangements of the CPC Central Committee and the State Council, and adopted a series of measures to encourage, support and promote the development of private investment. Since last year, we have promulgated 17 policies and measures to promote private investment, promoted the solution of the problems and demands of private enterprises, established a new mechanism for cooperation between the government and social capital, publicly introduced major projects to the society, attracted the participation of private capital, and vigorously created a good environment for the development of private investment. According to the platform of private capital promotion projects, as of February 29, there were 1612 projects attracting private capital, with a total investment of more than 2 trillion yuan. With the implementation of a series of policies, the growth rate of private investment in the country gradually stabilized in the last few months of last year. From January to February this year, private investment increased by 0.4% year-on-year, and the growth rate turned from negative to positive, which can be said to show a good development trend.
In the next step, the National Development and Reform Commission will, in accordance with the decision-making arrangements of the CPC Central Committee and the State Council, promote the development of private investment with greater efforts and more practical measures, focus on stabilizing and expanding private investment, and strive to maintain a steady growth trend of private investment.
First, improve the institutional environment so that private enterprises can "feel at ease". At present, the law on the promotion of private economy is being studied and drafted to provide legal protection for better promoting the development of private economy and create a stable and predictable institutional environment for private investment.
Second, broaden the investment space and let private enterprises "have some investment". It is mainly to promote local and related industries to implement the new mechanism of cooperation between government and social capital, manage and make good use of private investment guidance projects in central budget investment, and encourage private enterprises to participate in the construction and operation of infrastructure projects to the greatest extent.
Third, strengthen the factor guarantee, so that private enterprises can "invest well". We will build and make good use of the national key private investment project library, strengthen the guarantee of financing and land use for private investment projects through mechanisms such as investment and loan linkage and land use guarantee for major projects, and promote the implementation of more private investment projects. At the same time, it is necessary to strengthen the evaluation and scheduling of promoting private investment, fully mobilize the enthusiasm of local governments to encourage the development of private investment, and promote the formation of joint efforts in all aspects. Thank you.
China Daily reporter:
Employment is the foundation of people’s livelihood, and all sectors of society are very concerned about it. What measures does the Ministry of Finance take to support the employment of key people?
Liao Min:
Thank you for your question. The CPC Central Committee and the State Council attached great importance to the employment work, and emphasized the overall consideration of raising stable employment to a strategic level. As we all know, only when there is employment can there be income, only when there is income can there be consumption, and only when there is consumption can there be domestic demand. The Ministry of Finance continues to base itself on its financial functions, promote the implementation of the employment priority strategy, and strengthen employment support for key groups such as college graduates, migrant workers and people with employment difficulties. This year, we will focus on the following aspects to do relevant work:
First, give more prominence to the employment priority orientation. Persist in taking stabilizing and expanding employment as the priority goal of economic and social development, and pay more attention to promoting employment when formulating fiscal and taxation policies. In 2024, the central government allocated 66.7 billion yuan of employment subsidy funds to support the implementation of employment and entrepreneurship support policies.
The second is to support business entities to stabilize jobs. It is mainly to implement the structural tax reduction and fee reduction policy, continue to implement the phased policy of reducing unemployment and industrial injury insurance rates, and strive to reduce the cost burden of business entities. We will continue to implement the policy of returning unemployment insurance to stable posts, and return the unemployment insurance premiums actually paid in the previous year in proportion to enterprises that do not lay off employees or reduce employees, so as to support enterprises to stabilize their posts and absorb employment.
The third is to help play the role of entrepreneurship in promoting employment. The financial department will give discount loans to eligible key groups and small and micro enterprises that have absorbed their employment. We have made an internal calculation to guide government financing guarantee institutions to increase their inclination to labor-intensive enterprises. It is estimated that in 2024, 1.3 trillion yuan of new loans will be mobilized, more than 12 million jobs will be stabilized, and more than 600,000 new jobs will be created. Support colleges and universities to strengthen innovation and entrepreneurship education and enhance college students’ innovation and entrepreneurship ability. Business start-up subsidies will be given to qualified college graduates and people with employment difficulties who start small and micro enterprises for the first time or engage in self-employment.
The fourth is to continue to focus on the employment of key groups. Encourage enterprises to increase recruitment efforts, give social insurance subsidies to those who attract employment from key groups, and give employment internship subsidies to those who recruit qualified college graduates. We will tap more employment opportunities and jobs at the grassroots level, and implement the western plan, the "three supports and one support" plan, the "special post plan" and the special plan for college students’ village doctors. The financial department will give support to encourage and guide college graduates to work at the grassroots level. At the same time, the tuition fees of eligible college graduates who are employed in hard and remote areas will be compensated. In addition, we will continue to provide classified employment assistance to the poverty-stricken population, rural low-income population and the disabled, and consolidate the results of poverty alleviation.
These measures are real, and it is expected that with the gradual implementation in place, they will play a positive role in promoting employment this year and make contributions to the financial sector. Thank you.
Xinhua News Agency China Economic Information Agency reporter:
At the end of February, data such as social financing scale and M2 have been released. Excuse me, does the growth rate of these indicators match the current economic situation in China? How should we view the performance of these indicators? Thank you.
Xuan Changneng:
Thank you for your question. Both the Central Economic Work Conference and the Government Work Report emphasized that monetary policy should be steady, the scale of social financing should be maintained, and the money supply should match the expected targets of economic growth and price level. The expected target for this year is GDP growth of about 5% and consumer price increase of about 3%, which means that the expected target of nominal economic growth is about 8%. At the end of February, the scale of social financing and M2 of broad money increased by 9% and 8.7% respectively, which was not low on the whole, which matched the expected growth target mentioned above and still reflected the countercyclical adjustment of monetary policy. These data can be analyzed from the following angles:
First, the base was relatively high in the same period last year. At the beginning of last year, China was still in the initial stage of epidemic prevention and control, and the domestic economy was greatly affected. The macro-policy was put forward, the response was significantly increased, and the financial indicators grew rapidly. The growth rates of M2 and social financing reached 12.9% and 9.9% at the end of February last year, respectively, of which the growth rate of M2 increased by 3.7 percentage points compared with the same period of the previous year. At present, the national economy continues to improve, the growth rate of industrial production and import and export exceeds expectations, and consumption and investment have steadily picked up. The total amount of financing this year has continued to increase by about 9% on the basis of last year’s high base, which is actually relatively high.
Second, pay more attention to the steady pace of credit supply. In the first quarter of last year, loans were increased, which supported the accelerated economic recovery after the epidemic. Since the beginning of this year, the overall economic recovery has improved. Apart from paying attention to the total amount, we have also paid more attention to guiding the smooth credit supply of financial institutions to avoid the "good start" rushing too hard, resulting in insufficient stamina. Judging from the financial data of these two months, the previous guidance has produced results, and it is expected that the financial support for the real economy will be more sustainable this year.
Third, the efficiency of financial resource allocation has improved. The Central Economic Work Conference emphasized the need to revitalize the stock and improve efficiency, while the Central Financial Work Conference emphasized the need to revitalize the financial resources that were occupied inefficiently. The "Government Work Report" emphasizes the need to avoid idling of funds. At the end of February, the balance of loans reached 244 trillion yuan, mainly reflecting the M2 balance of deposits of enterprises and residents as high as 300 trillion yuan. These stock resources are at the disposal of enterprises and residents and can be used to support economic development. At present, the scale of China’s money and credit stock is large enough. With the adjustment of economic structure, transformation and upgrading, and the improvement of the efficiency of the conversion of old and new kinetic energy, the use efficiency of stock resources will be significantly improved, which can better support the high-quality economic development. At the same growth rate, financial support for the real economy is still stable.
Generally speaking, in the stage of economic structure transformation and upgrading and high-quality development, we should not only look at the increment and growth rate of financial data, but also pay attention to the improvement of stock quality and efficiency. At the same time, there is a close relationship between financial tightness and the quality of economic growth. A moderately tight financial environment is conducive to investing financial resources in more efficient industries and enterprises. The People’s Bank of China will guide financial institutions to actively tap credit demand, scientifically formulate annual credit arrangements, revitalize existing financial resources, and at the same time support the accelerated development of direct financing to maintain a reasonable increase in the total amount of money, credit and financing.
Thank you.
China Financial News reporter:
Creating a market-oriented, legalized and internationalized first-class business environment is the key word in this year’s Government Work Report. In recent years, what measures has the Ministry of Finance taken to improve the business environment, especially to facilitate foreign-funded enterprises and products to enter the China market and participate in the competition on an equal footing? What are the next considerations? Thank you.
Liao Min:
Thank you for your question. Optimizing the business environment is the key to cultivate and stimulate market vitality and enhance the endogenous power of development. A few days ago, the National People’s Congress (NPC) and the National People’s Congress (NPC) have closed, and relevant macroeconomic policies, objectives and measures have been released. At the same time, it continues to release a clear signal of expanding high-level opening-up, demonstrating China’s belief and determination to continuously improve the business environment. Recently, the General Office of the State Council has just issued the Action Plan for Firmly Promoting High-level Opening-up and Greater Attraction and Utilization of Foreign Capital, expecting more measures.
We know that for Chinese-funded enterprises, China’s market with a population of 1.4 billion is a domestic market, but for foreign-funded enterprises, China’s market with a population of 1.4 billion is one of its most important international markets. Therefore, it is of great significance for China enterprises to "go global" and for global investors to "come in" to promote the implementation of high-level institutional opening. China’s high-quality development and the cultivation of new-quality productive forces will increasingly turn into opportunities shared by the whole world, and the open China market will also provide more new opportunities for world development.
In recent years, the Ministry of Finance has actively participated in building a first-class business environment and made some positive progress. Here is a report for everyone: First, we will continue to reduce the overall level of tariffs. At present, the overall tariff level has been reduced to 7.3%, which is at a low level in the world. Second, actively participate in international tax reform, multilateral and bilateral financial exchanges and cooperation, learn from international best practices, and share China’s experience in reform and opening up. Third, in government procurement, we treat the products and services produced by domestic and foreign-funded enterprises in China equally, and clean up and rectify the regulations and practices that treat domestic and foreign-funded enterprises differently. Fourth, pay attention to communication with foreign investors and enterprises, and actively solve their practical difficulties and problems in government procurement, enterprise-related taxes and fees, etc. We have a special mechanism to investigate and deal with the information in time after receiving it. Fifth, mutual recognition of accounting standards and auditing standards has been achieved with many countries, supporting transnational investment, trade and financial activities. Sixth, we will increase financial support for improving the protection of intellectual property rights, support the examination of patents and trademarks, promote the use of intellectual property rights, and strengthen intellectual property protection throughout the chain.
The business environment is not the best, only better. In the next step, we will continue to improve the protection mechanism of foreign investment rights and interests, reduce the negative list of foreign investment access, fully protect the national treatment of foreign-invested enterprises, continuously strengthen the protection of intellectual property rights, break down the barriers that restrict the flow of innovation factors, accelerate the construction of a unified big market, and provide better protection for enterprises from all over the world to invest in China. Thank you all.
American International Market News Agency reporter:
The central bank’s creditor’s rights to deposit-taking financial institutions have reached a record high. The balance sheet of the central bank has expanded by more than 5 trillion yuan since last August, but the credit growth rate is relatively slow. How to explain this difference? Does finance need to continue to reduce leverage in view of the idling of funds?
Xuan Changneng:
Thank you for your question. You actually asked two questions. The first is about the central bank’s balance sheet. According to the Law of the People’s Bank of China, the statutory goal of monetary policy is to maintain the stability of the currency value and promote economic growth. In recent years, the requirement of prudent monetary policy is to keep the liquidity reasonable and abundant, and to match the scale of social financing and money supply with the expected goals of economic growth and price level, so as to achieve the statutory goals. When the central bank achieves its goal, it will comprehensively use a variety of monetary policy tools, including deposit reserve ratio, refinancing, open market operations and so on. Among them, the RRR cut will reduce the demand for reserves, release long-term liquidity, and have a substitution effect on central bank funds; The central bank will increase the creditor’s rights of deposit-taking financial institutions and will actively put in liquidity. If the RRR is lowered more, the central bank’s balance sheet will expand less; If the RRR cut is less, the central bank’s balance sheet will expand a little. Which tool to use depends on the needs of different situations, and the quantity will be more or less. Overall, it is to create a good monetary and financial environment.
The balance sheet changes of foreign central banks are also very concerned, especially QE and QT of major foreign central banks, because their statutory deposit reserve ratio is almost zero, and there is little room for adjustment. More attention is paid to adjusting liquidity by actively expanding and contracting the table. The average level of China’s deposit reserve ratio is still 7%, which is still an important means of liquidity. In addition, the balance sheet of China’s central bank is about 45 trillion yuan, and the loan balance is 244 trillion yuan, the ratio of which is close to 1: 5. Compared with foreign central banks, China’s monetary policy transmission is effective, and the current credit growth rate is also maintained at a reasonable level, which is conducive to achieving the statutory goals of the central bank and supporting high-quality economic development. As mentioned by foreign central banks just now, open market operation is the main channel to regulate liquidity, that is, the main means to expand and shrink the table.
The second question is about the idling of funds. All parties are concerned about this issue, and we are also strengthening monitoring. We will continue to pay close attention to the transfer and lending of corporate loans, cooperate with relevant departments, improve the management assessment mechanism, and promote the efficiency of capital use. At present, the effect of preventing funds from idling has already appeared. As enterprises standardize the use of funds, the growth rate of total financing may be lower than before, but the actual support for high-quality economic development will be even greater.
Thank you.
Shou Xiaoli:
Due to the time, the last two questions.
The picture shows Shou Xiaoli, deputy director and spokesperson of the State Council Information Office, inviting reporters to ask questions. (photo by Yan Haijun)
Reuters reporter:
We are concerned that the central bank recently proposed to maintain price stability and promote a moderate price recovery as an important consideration of monetary policy. I wonder what specific policies the central bank will have in the next step to boost domestic demand, guard against possible deflation risks and ensure the realization of this year’s economic growth target? Thank you.
Xuan Changneng:
Regarding the price issue, I will make some explanations and explanations from the perspective of monetary policy.
From a quantitative point of view, to keep the scale of social financing and money supply in line with the expected targets of economic growth and price level, it implies the consideration of adjusting the price level through monetary policy. The annual target of monetary policy has taken into account the maintenance of price stability and the promotion of moderate price recovery. The expected target this year is GDP growth of about 5% and consumer price increase of about 3%. If the scale of social financing and M2 growth rate are not less than 8%, the expected target of 3% price level has been considered.
From the price point of view, by deepening the interest rate marketization reform, guiding banks to lower the deposit interest rate, and promoting the loan market quotation rate (LPR) to continue to decline, all these are conducive to reducing the comprehensive financing cost of society, stimulating potential consumption, expanding effective investment, maintaining price stability, and promoting a moderate price recovery.
In the next step, the People’s Bank of China will guide financial institutions to scientifically assess risks, curb the blind expansion of industries with overcapacity, meet the demand for reasonable consumption financing, and improve the quality and efficiency of financial services by optimizing the credit structure. At the same time, strengthen policy coordination, support the increase of residents’ income, expand employment, improve the social security system, thoroughly implement the consumption-driven strategy, focus on expanding domestic demand, promote the matching of supply and demand, and promote a virtuous circle of the economy. All these have an important supporting role in the moderate recovery of the price level.
thank you
Southern Metropolis Daily reporter:
We noticed that the investment in equipment manufacturing and high-tech manufacturing in January and February was significantly higher than the overall manufacturing investment growth rate. What is the development trend of related fields? How to cultivate and expand strategic emerging industries in the next step? Thank you.
Liu Sushe:
Just now, I mentioned that in January and February this year, the growth rate of manufacturing investment accelerated, up 9.4% year-on-year, and the growth rate was 5.2 percentage points higher than the overall investment, which became an important support for stable investment and stable economy. Among them, investment in equipment manufacturing industry increased by 14.3% year-on-year, and investment in high-tech manufacturing industry increased by 10%, both faster than the growth rate of overall manufacturing investment. These data show that the pace of transformation and upgrading of China’s manufacturing industry is accelerating, the structure is continuously optimized, and industries with high technology, high efficiency and high quality are showing a good trend of development.
The rapid growth of investment in equipment and high-tech manufacturing industry is behind the investment of "real money and silver". Being able to make such investment decisions not only has the support and guidance of national policies, but also reflects the confidence of enterprises in future development. In terms of supporting policies, the National Development and Reform Commission issued and implemented the Guiding Catalogue of Industrial Structure Adjustment (2024 edition), organized major technical equipment research projects and actions to enhance the core competitiveness of manufacturing industry, focused on the shortcomings of industrial development, increased support for technological innovation, and promoted strategic emerging industrial clusters to become better and stronger. From the production situation, from January to February, the added value of equipment manufacturing industry above designated size increased by 8.6%, and the added value of high-tech manufacturing industry increased by 7.5%, which was 1.6 and 0.5 percentage points higher than the total industrial added value respectively. At the same time, the output of service robots and 3D printing equipment increased by 22.2% and 49.5% respectively. From the perspective of economic benefits, the profit of China’s equipment manufacturing industry increased by 4.1% in 2023, 2.4 percentage points faster than that in 2022, which provided strong support for expanding production and investment in related fields.
In the next step, our Committee will conscientiously implement the decision-making arrangements of the CPC Central Committee and the State Council, accelerate the cultivation and development of new quality productive forces, and vigorously promote the construction of a modern industrial system. We will strengthen the dominant position of enterprise innovation, lead industrial innovation with scientific and technological innovation, and promote the formation of an enterprise echelon with leading enterprises leading innovation, rapid growth of small and medium-sized enterprises and emerging start-ups; Create a highland for industrial agglomeration and development, promote the development of strategic emerging industries, and create a number of new regional economic growth poles with reasonable structure, unique characteristics and complementary advantages; Optimize the ecology of industrial innovation and development, improve the working mechanism of talent training, introduction, use and rational flow, innovate diversified capital supply, and actively integrate into the global innovation ecology. Through these measures, we will accelerate the development of strategic emerging industries, constantly shape new kinetic energy and new advantages for development, and promote high-quality economic development. Thank you.
Shou Xiaoli:
Thank you, three publishers, and thank you, journalists and friends. That’s all for today’s press conference. Goodbye!
