The National Development and Reform Commission, Ministry of Finance, Central Bank of China, and State Administration of Taxation jointly speak up! 10 Key Economic Points | Policies | Central Bank

On August 4th, the National Development and Reform Commission, the Ministry of Finance, the People's Bank of China, and the State Administration of Taxation jointly held a press conference. Zou Lan, Director of the Monetary Policy Department of the People's Bank of China, Yuan Da, Deputy Secretary General and Director of the Comprehensive Department of the National Development and Reform Commission, Luo Tianshu, Chief Accountant of the State Administration of Taxation, and Wei Yan, Deputy Director of the Taxation Department of the Ministry of Finance, attended the conference to introduce the situation of "playing a good combination of macroeconomic policies and promoting high-quality economic development".

Let's take a look at the key statements of the meeting:

1. The comprehensive evaluation of the reserve requirement ratio policy aims to maintain a reasonable and sufficient liquidity in the banking system;

2. In the future, we will continue to give full play to the efficiency and guiding role of the loan market quotation interest rate reform, and guide banks to adjust the interest rates of existing personal housing loans in an orderly manner in accordance with the law;

3. According to the economic and financial situation and macroeconomic regulation needs, timely and moderately carry out countercyclical adjustment;

4. If necessary, new tools can be created to continuously support key areas and weak links such as inclusive finance and green low-carbon;

5. Continuously plan and research a batch of more targeted and stronger reserve policies, and timely implement them in batches according to changes in the situation;

6. Strengthen policy reserves in preventing and resolving internal and external risks and challenges, firmly guarding the bottom line of preventing systemic risks from occurring;

7. Guide local finance and taxation departments to accurately grasp the various tax and fee policies supporting the development of small and micro enterprises and individual businesses, implement detailed policy measures, and not weaken policy strength;

8. The Ministry of Finance will announce the follow-up arrangements for tax and fee preferential policies in the near future;

9. The Ministry of Finance will focus on technological innovation, key industrial chains, establishing a modern industrial system, promoting income growth and consumption expansion, and actively plan targeted and pragmatic tax and fee preferential policies;

10. Promote various departments to strengthen policy coordination and work collaboration, and prevent the occurrence of "synthesis errors".

Is there still room for reserve requirement and interest rate cuts? Central Bank Response

Zou Lan stated that on the one hand, reserve requirement reduction, open market operations, medium-term lending convenience, and various structural monetary policy tools all have a total effect on liquidity injection. It is necessary to coordinate and flexibly use them to jointly maintain the reasonable and sufficient liquidity of the banking system. A comprehensive evaluation of the reserve requirement ratio policy aims to maintain the reasonable and sufficient liquidity of the banking system.

On the other hand, it is necessary to scientifically and reasonably grasp the level of interest rates. Based on the economic and financial situation and macroeconomic regulation needs, timely and moderately carry out countercyclical adjustment, while also taking into account the balance between growth and risk, internal and external factors, preventing fund arbitrage and idle, improving policy efficiency, and enhancing the stability of bank operations.

Zou Lan introduced that in recent years, there has been a significant decrease in corporate loan interest rates. In the future, we will continue to play a good role in the reform of loan market quotation interest rates and guide banks to adjust the interest rates of existing personal housing loans in an orderly manner in accordance with the law. At the same time, we must continue to play an important role in the market-oriented adjustment mechanism of deposit interest rates, maintain market competition order, support banks in reasonably controlling debt costs, and enhance the ability of finance to continuously support the real economy.

Since the beginning of this year, structural monetary policy tools have played a positive role in incentivizing and guiding financial institutions to optimize the allocation of credit resources. Data shows that as of the end of June 2023, the balance of structural monetary policy instruments was approximately 6.9 trillion yuan. Among them, the balance of re loans and rediscounts supporting inclusive finance for agriculture and small businesses is approximately 2.6 trillion yuan, which is basically the same as the end of the previous year; The balance supporting green, low-carbon, technological innovation and other fields is approximately 1.2 trillion yuan, an increase of 516.6 billion yuan from the end of last year.

Zou Lan stated that in the next stage, the People's Bank of China will conscientiously implement the deployment of the Central Politburo meeting, give full play to the dual functions of monetary policy quantity and structure, continue to implement existing tools, extend the implementation period for areas where structural contradictions are still prominent, take multiple measures to consolidate policy effectiveness, and if necessary, create new tools to continue supporting key areas and weak links such as inclusive finance and green low-carbon.

In June this year, the People's Bank of China increased the amount of loans and rediscounts for supporting agriculture and small businesses by 200 billion yuan. Zou Lan stated that currently, there is sufficient amount of re lending and rediscounting for supporting agriculture and small businesses, and financial institutions can further increase it when needed.

In addition, monetary policy tools will support the stable operation of the real estate market. The People's Bank of China will continue to implement the guaranteed housing loan support plan until the end of May 2024, while steadily promoting the implementation of the rental housing loan support plan in pilot cities.

Market expectations have improved, and policy reserves for strengthening prevention and resolution of internal and external risk challenges have been strengthened

In June, in response to the new changes in the economic operation in the second quarter, the National Development and Reform Commission, together with relevant departments, timely launched a reserve policy to promote the sustained recovery and improvement of the economy.

Yuan Da revealed that various departments are currently working hard to implement policies and measures, including guiding market interest rates to decline, promoting consumption of commodities such as automobiles, promoting the transformation of urban villages in mega cities and the construction of public infrastructure for both emergency and emergency use, and orderly expanding the issuance scale of real estate investment trust funds in the infrastructure sector. Other policies are also being promoted, providing strong policy support for sustained economic recovery.

Yuan Da stated that based on the latest economic operation data currently available, the growth rate of physical quantity indicators has accelerated. In July, the national unified power generation increased by 5.9% year-on-year, which is 1.5 percentage points faster than the previous month; Market expectations have also improved, and the manufacturing PMI has rebounded for two consecutive months. With the continuous manifestation of the effects of various policies of "combination boxing", the economy in the second half of the year will maintain a stable and positive trend on the basis of continuous recovery in the first half of the year.

"We will continue to plan and research a number of more targeted and stronger reserve policies, and timely introduce and implement them in batches according to changes in the situation." Yuan Da said that in the next stage, the planning policies of the National Development and Reform Commission will focus on actively expanding domestic demand, strengthening and optimizing the real economy, promoting high-level scientific and technological self-reliance, continuously deepening reform and opening up, effectively ensuring and improving people's livelihoods, and preventing and resolving risks in key areas.

Among them, in terms of strengthening and optimizing the real economy, we need to increase efforts to clear outstanding accounts of enterprises, especially small and medium-sized enterprises, and strengthen financial and tax support for small and micro enterprises and individual businesses. Accelerate the transformation and upgrading of traditional industries, cultivate strategic emerging industries, and plan and layout a number of future industries.

In terms of preventing and resolving risks in key areas, we will systematically plan and implement precise policies, prudently handle and resolve risks and hidden dangers in real estate, local debt, finance, and other fields, and vigorously enhance our ability to ensure the security of food and energy resources. Continue to implement phased policies to support the "guaranteed delivery of buildings" work and assist in the disposal of non-performing assets. Strengthen policy reserves in preventing and resolving internal and external risks and challenges, and firmly guard against the bottom line of systemic risks.

Yuan Da pointed out that in order to play a good combination of macroeconomic policies, the key is to strengthen the analysis and judgment of the economic situation, strengthen the evaluation of consistency with macroeconomic policy orientation, and strengthen the linkage between central and local governments and enterprises.

Yuan Da emphasized that before each department prepares and issues policy documents, it is necessary to conduct a consistency assessment of the content and timing of the policy documents with the macroeconomic policy orientation, promote strengthened policy coordination and work collaboration among departments, closely cooperate, work together in the same direction, form a joint force, prevent the problem of "synthesis fallacy", and maintain a stable and predictable macroeconomic policy environment. At the same time, further improve the regular communication and exchange mechanism between government departments and enterprises, listen to the real situation of enterprise operation and development, study and propose practical and effective policy measures, and help enterprises solve practical difficulties.

Local finance and taxation departments shall not weaken policy efforts

On July 31, the Executive Meeting of the State Council deployed and arranged 10 tax and fee preferential policies related to small and micro enterprises and individual businesses. Among them, 4 phased policies were optimized, improved and supported, and will be uniformly implemented until the end of 2027. This includes halving the scope of personal income tax for individual workers and merchants, adjusting the annual taxable income from no more than 1 million yuan to no more than 2 million yuan; For key groups such as fresh college graduates engaged in individual business, the limit for deducting value-added tax and other taxes in sequence will be adjusted from 12000 yuan per household per year to 20000 yuan per household per year.

In addition, six phased policies will continue to be implemented until the end of 2027, including tax incentives for small-scale taxpayers, tax incentives for small loans, tax incentives for financing guarantees and re guarantees, tax incentives for loan contracts, tax incentives for small and micro enterprise income, and tax incentives for entrepreneurial investment.

Wei Yan pointed out that the Ministry of Finance will guide local financial and tax departments to accurately grasp the various tax and fee policies supporting the development of small and micro enterprises and individual businesses, implement detailed policy measures, and not weaken policy strength.

At the same time, it is strictly prohibited to collect taxes and fees in accordance with the law and regulations, and to engage in illegal and irregular activities such as excessive taxation, illegal collection of taxes and fees, and inflated income. Promptly publish the catalog of government funds and administrative fees, actively accept social supervision, and shall not arbitrarily add fee items, expand the scope of collection, or raise collection standards outside the catalog. Strengthen the supervision and management of enterprise related fees, monitor the implementation of various enterprise related fee policies, and resolutely crack down on the problems of arbitrary fees, fines, and assessments.

In addition, it is necessary to strengthen policy guidance directly aimed at small and micro enterprises and individual businesses, helping enterprises to timely understand policies and make full use of them.

Wei Yan revealed that the Ministry of Finance will soon announce the follow-up arrangements for tax and fee preferential policies to stabilize expectations and boost confidence. Focusing on technological innovation, key industrial chains, establishing a modern industrial system, promoting income growth and consumption expansion, actively planning targeted and practical tax and fee preferential policies, focusing on relieving difficulties for business entities, continuously enhancing development momentum, optimizing economic structure, and promoting sustained economic recovery and improvement.

Strictly crack down on illegal activities such as maliciously defrauding tax benefits

Recently, a series of continued, optimized, and improved tax and fee preferential policies are being launched. Luo Tianshu stated that the State Administration of Taxation will deploy and implement them as soon as possible, issue policy announcements, accurately push policies, clarify tax collection and management regulations, upgrade information systems, and improve service measures, so that taxpayers can enjoy the policies as soon as possible and in a timely manner. At the same time, taxpayers can enjoy the policy by declaring normally without the need for additional information. In addition, we also make every effort to facilitate taxpayers to enjoy policies, upgrade through the electronic tax bureau, provide relevant data pre filling services, and help taxpayers automatically calculate tax reductions and exemptions. Taxpayers can choose how to enjoy the policy based on their own situation. Due to the policy being issued after the start of the declaration period, and some policies being retroactively implemented from January 1st of this year, taxpayers who have already declared and paid relevant taxes before the policy is announced will be reminded by the tax department on a one-on-one basis. Taxpayers can correct their declarations and apply for tax refunds, or offset future taxes.

Luo Tianshu pointed out that in the next step, the State Administration of Taxation will make every effort to provide high-quality tax collection and management services, standardize policy implementation with high standards, strengthen policy guidance through multiple channels, take multiple measures to solve problems and demands, and continue to focus on the "last mile" of policy implementation, ensuring that taxpayers and payers can conveniently and quickly enjoy the real policy dividends.

At the same time, for illegal activities such as maliciously obtaining tax benefits, the tax authorities will crack down severely in accordance with the law. Tax personnel who collude and cheat internally and externally will be investigated and dealt with seriously in accordance with discipline and law, maintaining a fair market environment based on the rule of law, promoting continuous improvement in economic operation, and enhancing endogenous motivation, making greater contributions to serving high-quality development.