China’s finance minister has highlighted efforts to ensure that fiscal policy in 2023 better caters to the needs of the country’s market actors.
In an interview with the People’s Daily, finance minister Liu Kun (刘昆) stressed the need for fiscal policy to “focus on implementation of policy that caters to the needs of market entities and greatly invigorate market confidence,” as originally mandated by the central economic work meeting held at the end of 2023.
“Enterprises are the key vessels for driving high-quality growth, and invigorating the growth confidence of enterprises has major significance for stabilising growth and stabilising employment,” Liu said.
“In recent years, we have implemented a series of policies to cut taxes and reduce fees. Government revenues have used the method of subtraction to enable enterprises to lighten their burdens and increase their vitality, and effectively improve the expectations of market actors.”
Liu pointed out that tax revenues as a share of Chinese GDP fell from 17.4% in 2018 to 15% in 2021, putting them at a comparatively low level amongst the world’s major economies.
“Especially in 2022, we implemented large-scale value-added tax credits and rebates, while new tax cuts, fee reductions and tax rebates exceeded 4 trillion yuan, helping enterprises to overcome difficulties and remain on a solid footing.”
Liu said that in 2023, China’s fiscal authorities would continue to “focus on the needs of market actors, engage in targeted implementation of policy and help reduce the burden and increase the capability of enterprise,” with an especial focus on areas including:
- Helping enterprises to alleviate difficulties. Extending and optimising those existing tax cut and fee reduction measures that warrant extension or optimisation, as well as continuing to rectify illicit fee collection from enterprises.
- Stimulate vitality. Firmly implement the “two unwaverings,” and treat all market entities equally and fairly when it comes to fiscal subsidies, tax and fee preferences and government procurement. Optimise the the enterprise development environment.
- Support employment. Engage in overall coordination of fiscal policy tools, employ multiple channels to support the stabilisation and expansion of job positions. Help key demographics including tertiary graduates, rural migrant workers and the economically disadvantaged to find employment and engage in entrepreneurship.
During the interview, Liu also shed light on plans by Beijing to expand the “intensity and efficiency” of China’s fiscal policy in 2023.