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Fiscal focus to lift economic resilience

By LIU ZHIHUA and LIU ZIZHENG | CHINA DAILY | Updated: 2023-12-23 07:09
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A view of the Lujiazui area of Pudong, East China's Shanghai. [Photo/Xinhua]

China will implement a moderately expansionary fiscal policy next year while improving the efficiency and effectiveness of fiscal governance, to bolster economic resilience, prevent risks, and enhance public confidence, said the annual work conference of the Ministry of Finance held from Thursday to Friday.

That aims to further consolidate and add steam to economic recovery momentum, boost high-quality development and maintain social stability, thereby providing a firmer footing to efforts to advance the Chinese modernization and national rejuvenation drive.

"China needs to strengthen countercyclical and cross-cyclical adjustments in macroeconomic policies and continue to implement a proactive fiscal policy, to intensify fiscal policy effort while improving policy quality and efficiency," the meeting said.

While cross-cyclical adjustments focus more on long-term sustainable growth with long-term solutions to tackle the root cause of the problem, countercyclical adjustments focus more on short-term remedies to put the brakes on the current trend.

Intensifying fiscal policy effort means China will maintain the proper fiscal expenditure level to release more positive signals and set the scale of government investment smartly to give full play to its effects. Besides, the authorities will increase transfer payments to less privileged regions and weak areas, secure people's basic livelihoods, salaries for the public sector and government's operation at the grassroots level, and optimize the tax and fee policies by making them more accurate and target-oriented, the meeting said.

To improve fiscal policy quality and efficiency, China will make more efforts on six major fronts: practicing frugality in the governments, optimizing fiscal expenditure structure, enhancing performance management, enforcing financial discipline, enhancing financial sustainability and strengthening policy coordination.

The country will promote managing finance in a law-based, scientific, standardized and regulation-compliant manner, ensuring the cost-effectiveness of fiscal expenditures.

The conference also emphasized that the more proactive fiscal policy next year will focus on high-quality development, contributing to the Chinese modernization drive.

For example, fiscal support will be provided to accelerate the construction of a modernized industrial system, through advancing optimization and upgrades of the industrial structure, promoting innovation in industrial science and technology, and making local enterprises more competitive.

Fiscal policy will also continue to support domestic demand expansion and further implement the strategy for invigorating China through science and education.


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