Ministry of Finance: The country's financial strength was greatly enhanced during the “14th Five-Year Plan” period, and there is still plenty of room for future fiscal policy development

The Zhitong Finance App learned that on September 12, the State Information Office held a press conference on the theme of “Completing the 14th Five-Year Plan with High Quality” series to introduce the results of financial reform and development during the “14th Five-Year Plan” period. Minister of Finance Lan Foan explained at the meeting that the overall fiscal policy considers risk prevention and development, and that there is always room for future fiscal policy development. First, the long-term positive trend of China's economy has not changed. This determines that the basic system of financial operations has always been solid and stable. Second, over the years, we have accumulated more and more macro-control experience. Policy tools have been continuously enriched, and our ability to adjust countercyclical and cross-cycle has been greatly enhanced. Third, with the further improvement of institutional mechanisms for risk prevention in key areas and the gradual digestion of existing risks, finance is more emboldened and more relaxed in dealing with future challenges.

Lan Foan explained that during the “14th Five-Year Plan” period, the country's financial strength was greatly strengthened, and the “cake” of revenue was getting bigger and bigger. The national general public budget revenue is expected to reach 106 trillion yuan, an increase of 17 trillion yuan over the “13th Five-Year Plan” period, an increase of about 19%. The intensity of spending is unprecedented. The country's general public budget is expected to exceed 136 trillion yuan in five years, an increase of 26 trillion yuan over the “13th Five-Year Plan” period, an increase of 24%, and more “real money” is invested in major development events and people's livelihood.

Lan Foan said that during the “14th Five-Year Plan” period, fiscal macro-control was more active and promising, and fiscal policies further strengthened their adaptability to the economic situation, from active to more active, strategically more proactive and tactically accurate, and became an important force supporting the steady and healthy development of the economy. On the one hand, countercyclical regulation is strengthened to iron out short-term fluctuations. On the other hand, coordinate and promote cross-cycle adjustments to enhance medium- to long-term development momentum. Support the expansion of domestic demand, help the development of new quality productivity, promote a smooth economic cycle, and promote effective qualitative and quantitative growth of the economy. Over the past four years, China's economy has achieved an average growth rate of 5.5%, and its contribution rate to world economic growth has remained around 30%.

Blue Buddha continued that during the “14th Five-Year Plan” period, the central government arranged transfers of nearly 50 trillion yuan to local authorities in five years, making maximum efforts to reduce financial resources and secure the bottom line of the “Three Guarantees”, and the overall operation of local finance was stable. Since the 14th Five-Year Plan, fiscal policy has been more vigorous. The deficit rate increased from 2.7% to 3.8%, and further increased to 4% this year; additional local government special bond amounts of 19.4 trillion yuan were arranged; additional tax cuts and tax refunds exceeded 10 trillion yuan.

Looking ahead to the “15th Five-Year Plan,” Lan Foan said that the Ministry of Finance will firmly anchor the goal of fully becoming a socialist modern power, strengthen financial macro-control with greater efficiency, deepen fiscal and taxation system reform more vigorously, promote scientific financial management at a higher level, and contribute new financial strength to the promotion of Chinese-style modernization.

Regarding financial system reform, Vice Minister of Finance Liao Min said that anchoring the three goals of “clear authority and responsibility, coordination of financial resources, and regional balance” requires impetus for financial system reform. Better mobilize the enthusiasm of the central government and local authorities, appropriately increase central financial authority and expenditure responsibilities, improve the common financial authority system, and achieve clear powers and responsibilities. Accelerate the reform of the financial system below the provincial level, promote the decline in financial resources, continuously enhance financial security capabilities at the grassroots level, and promote financial coordination.

By optimizing the transfer payment system, establishing and improving transfer payment incentive and restraint mechanisms to promote high-quality development, horizontal ecological protection compensation mechanisms, etc., transfer payment management is more scientific, standardized, and effective, which has strongly promoted regional balance. Since the 14th Five-Year Plan, transfers from the central government to local authorities have accumulated nearly 50 trillion yuan, supporting local authorities to better implement the decisions and arrangements of the Party Central Committee.

The transcript is as follows:

Shou Xiaoli, Director of the Information Bureau of the Information Office of the State Council and press spokesman:

Good afternoon, ladies and gentlemen! Welcome to the press conference of the Information Office of the State Council. Today, we will continue to hold a series of press conferences on the theme of “Completing the 14th Five-Year Plan with High Quality”. We are very happy to invite Minister of Finance, Mr. Lan Foan, to introduce the results of financial reform and development during the “14th Five-Year Plan” period and answer everyone's concerns. Also attending today's press conference were Mr. Liao Min, Vice Minister of Finance, Mr. Wang Dongwei, Vice Minister, and Ms. Guo Tingting.

Next, let's first ask Mr. Lan Foan to give an introduction.

Treasury Secretary Lan Pho An:

Thanks to the host! Good afternoon, media friends! I am very happy to meet you all face to face.

First, on behalf of the Ministry of Finance, I would like to thank everyone for their long-term attention and support for financial work! Below, I will briefly introduce financial development achievements during the “14th Five-Year Plan” period.

During the “14th Five-Year Plan” period, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at the core, the whole country made concerted efforts and forge ahead, and China achieved significant achievements in economic and social development. The financial department resolutely implements the decisions and arrangements of the Party Central Committee, insists on steady progress, reform and innovation, withstands risks and challenges, and expands development space. The country's financial strength continues to increase and efficiency continues to improve. The role of finance as the foundation and important pillar of national governance has been further highlighted, providing a solid guarantee for the steady and far-reaching progress of the cause of the Party and the country, and providing strong support for meeting the beautiful expectations of the masses. Here, I will introduce six aspects.

First, the country's financial strength has been greatly strengthened, and the concentration of financial resources has achieved many important tasks. On the one hand, the income “cake” is getting bigger and bigger. During the “14th Five-Year Plan” period, the country's general public budget revenue is expected to reach 106 trillion yuan, an increase of 17 trillion yuan over the “13th Five-Year Plan” period, an increase of about 19%. Local financial strength is growing steadily. Judging from 2024 data, the fiscal revenue of 16 provinces increased by more than 20% compared to 2020; 7 provinces exceeded 500 billion yuan, 2 of which exceeded 1 trillion yuan. On the other hand, the intensity of spending is unprecedented. The country's general public budget expenditure is expected to exceed 136 trillion yuan in five years, an increase of 26 trillion yuan over the 13th Five-Year Plan period, an increase of 24%. At the same time, the structure has been continuously optimized, and more “real money” has been invested in major development events and people's livelihood practices.

Second, fiscal macro-control is more active and proactive, promoting effective qualitative improvement and reasonable quantitative growth of the economy. During the “14th Five-Year Plan” period, fiscal policy further strengthened its adaptability to the economic situation, from being active to being more active, strategically more proactive, and more tactically accurate, becoming an important force supporting the steady and healthy development of the economy. On the one hand, countercyclical regulation is strengthened to iron out short-term fluctuations. For example, in the second and third quarters of last year, the downward pressure on China's economy increased markedly. The financial department implemented the Party Central Committee's plan and quickly introduced a package of incremental policies at the end of September, which strongly promoted a steady recovery of the economy. On the other hand, coordinate and promote cross-cycle adjustments to enhance medium- to long-term development momentum. Support the expansion of domestic demand, help the development of new quality productivity, and promote a smooth economic cycle. Over the past four years, China's economy has achieved an average growth rate of 5.5%, and its contribution rate to world economic growth has remained around 30%.

Third, the country's finance is more clearly oriented towards people's livelihood, and the achievements of the Chinese-style modernization drive benefit all people more and more fairly. People's livelihood has always been the heaviest and most successful in a country's financial ledger. During the “14th Five-Year Plan” period, the country's general public budget allocated 20.5 trillion yuan for education, 19.6 trillion yuan for social security and employment, 10.6 trillion yuan for health care, and 4 trillion yuan for housing security. In addition to spending in other fields, finance and people's livelihood invested nearly 100 trillion yuan. This year, the state finance allocated 100 billion yuan to distribute childcare allowances and 20 billion yuan to gradually implement free preschool education to respond positively to the concerns of the public. It can be said that whether it is a bustling city or a remote village, from children learning the language to the elderly, they can enjoy more and better livelihood security.

Fourth, risk prevention and mitigation in key areas is strong and effective, promoting high-quality development and a high level of safe and healthy interaction. In terms of local government debt, normalization has strengthened supervision and formed a “closed loop” management system for statutory debt. For hidden debts, stocks are resolved in an orderly manner, increases are resolutely curbed, and risks gradually subside. In terms of grass-roots financial operations, the central financial administration has arranged transfers of nearly 50 trillion yuan to local authorities over five years, reducing financial resources to the maximum extent and securing the bottom line of the “Three Guarantees”. The overall operation of local finance is stable. At the same time, we are collaborating to push the real estate market to stop falling and stabilize, and promote the reform and insurance of small and medium-sized financial institutions.

Fifth, advance fiscal and tax reform and management in depth to better serve the modernization of the country's governance system and governance capacity. In terms of reform, there are three main “focuses.” The first is to focus on optimizing allocation and improving efficiency, deepening the reform of the budget system, strengthening the coordination of capital resources and assets, strengthening budget performance management, and achieving “small money, small money and generous money.” The second is to focus on efficiency and fairness, optimize the tax system structure, standardize preferential tax policies, strengthen tax regulation, and continuously improve the tax system compatible with the economic and social structure. The third is to focus on mobilizing the enthusiasm of the central government and local authorities, establishing an incentive and restraint mechanism for transfer payments to promote high-quality development, continuously optimizing the division of financial authority and expenditure responsibilities between governments, and further clarifying “who does the work and who pays the money.” In terms of management, emphasis is placed on systematization, refinement, standardization, and rule of law. Starting from the source of budget preparation, it leverages the supporting role of expenditure standards, information technology, etc., and extends financial management throughout the entire chain of use of funds, horizontally to all departments and units, and vertically to the grassroots level in cities and counties.

Sixth, deepening and expanding international financial cooperation to better serve the foreign affairs of major countries with Chinese characteristics. International financial cooperation is an important part of the diplomacy of major powers. The Ministry of Finance is responsible for 26 multilateral and bilateral financial dialogue mechanisms, and is also a window department for 18 international organizations. We actively implement the common concept of the destiny of mankind, further promote global economic governance reforms, strengthen macroeconomic policy dialogue and coordination, promote high-quality joint construction of the Belt and Road Initiative, and support the steady operation of the AIIB and the New Development Bank. The AIIB, for example, has gone through its 10th year this year, with 110 members and a total financing scale of more than 60 billion US dollars. It has become a model for promoting inclusive global development. At the same time, we have expanded our high level of openness to the outside world and further reduced the overall tariff level to 7.3%. By deepening practical cooperation in the field of international finance, our “circle of friends” for win-win cooperation is larger and more stable. It has also made developing countries louder and heavier, and has won widespread praise from the international community, especially the countries of the global South.

The achievements described above are a microcosm of high-quality economic and social development during the “14th Five-Year Plan” period, a full reflection of the country's continuous improvement in strength and governance capacity, and a vivid practice of the Party's innovative theory in the field of finance. We deeply feel that the deep logic underpinning these achievements has always been clear and unaltered, which is to consistently uphold and strengthen the overall leadership of the Party, consistently adhere to the supremacy of the people, and consistently use reform methods to solve difficult problems.

Looking ahead to the “15th Five-Year Plan”, the Ministry of Finance will firmly anchor the goal of fully becoming a socialist modern power, strengthen financial macro-control with greater efficiency, deepen fiscal and taxation system reform more vigorously, promote scientific financial management at a higher level, and contribute new financial strength to the promotion of Chinese-style modernization.

Next, my colleagues and I will be very happy to answer your questions. Thank you.

Xiaoli Shou:

Thank you, Minister Lan, for the introduction. Now let's move on to the question-and-answer session. Please let us know your news agency before asking questions. Please raise your hand to ask.

CCTV Reporter from China Central Radio and Television:

Minister Lan just described how many new breakthroughs have been achieved in China's financial macro-control during the “14th Five-Year Plan” period. Can you give me a detailed explanation of the new characteristics of fiscal macro-control in recent years, and what are the next steps to consider? Thank you.

Blue Buddha:

Thank you for your question.

As the main instrument of macro-control, fiscal policy has the dual advantage of expanding aggregate demand and targeted adjustment structures. Since the 14th Five-Year Plan, fiscal policy has maintained a positive orientation, not only actively responding to short-term economic fluctuations and strengthening countercyclical adjustment, but also anchored the central task of advancing Chinese-style modernization and focusing on enhancing medium- to long-term development momentum; it not only focused on maintaining policy continuity and stability, but also making choices based on changes in the macroeconomic situation, scientifically grasping the pace of strength, and has become an important force for stable and healthy economic development. It can be broadly summarized into the following four characteristics:

First, it's more powerful in terms of strength. Since the 14th Five-Year Plan, the deficit rate has increased from 2.7% to 3.8%, and further increased to 4% this year; arrangements have been made to add an additional amount of 19.4 trillion yuan in local government special bonds; additional tax cuts and tax refunds and tax relief surcharges have exceeded 10 trillion yuan, further opening up fiscal policy space.

Second, the tools are richer. Comprehensive use of tools such as government bonds, taxes, fiscal interest rates, and special funds to strengthen collaboration with other macroeconomic policies and amplify policy multiplier effects. For example, creative issuance uses ultra-long-term special treasury bonds for “double” and “two new” to support all-round expansion of domestic demand.

Third, it is more accurate in terms of effort. Focus on the blockages and difficulties of economic development, and smooth the economic cycle through “leading the way and moving the whole body” initiatives. For example, arranging a debt limit of 6 trillion yuan to replace hidden existing debt has helped local authorities greatly reduce debt repayment pressure, free up financial resources to protect people's livelihood and promote development, and has played the role of “killing many birds with one stone.”

Fourth, the timing is more flexible. Seize the time window, and the sooner policies are introduced, the sooner they can be put in place, they will be given in one go to ensure early implementation and early results.

In the process, our understanding of the regularity of fiscal macro-control is also gradually deepening. For example, fiscal macro-control should generally be stable, but when the situation changes greatly, it is also necessary to make timely adjustments and enhance targeted flexibility. For example, more attention is being paid to promoting the microeconomic cycle. By supporting local replacement of hidden stock debts, issuing special bonds to support land reserves, and purchasing existing commercial housing for use as affordable housing, etc., it is unblocking local and corporate capital chains and breaking through circulatory blockages. Another example is strengthening coordination between fiscal and monetary policies to form policy synergy. This year, 500 billion yuan of special treasury bonds were specially issued to inject capital into large commercial banks. It is estimated that credit investment can be leveraged to invest about 6 trillion yuan.

Regarding the second question you mentioned, I would like to say that fiscal policy takes into account risk prevention and development in an integrated manner. There is always room for future fiscal policy development. First, the long-term positive trend of China's economy has not changed. This determines that the basic system of financial operations has always been solid and stable. Second, over the years, we have accumulated more and more macro-control experience. Policy tools have been continuously enriched, and our ability to adjust countercyclical and cross-cycle has been greatly enhanced. Third, with the further improvement of institutional mechanisms for risk prevention in key areas and the gradual digestion of existing risks, finance is more emboldened and more relaxed in dealing with future challenges. These are all our confidence and strengths to do a good job in finance.

In the next step, the financial department will continue to maintain policy continuity and stability, enhance flexibility and predictability, strengthen forward-looking research and judgment of the situation, make good policy reserves, take the initiative to advance, and contribute financial strength to high-quality economic and social development.

Thank you.

Hong Kong South China Morning Post Reporter:

How is fiscal reform progressing during the “14th Five-Year Plan” period? Next, how will the “15th Five-Year Plan” period balance the needs of economic development with the goal of stabilizing tax sources, and how to improve the financial relationship between the central government and local authorities? Thank you.

Blue Buddha:

Thank you. Please ask Vice Minister Liao Min to answer this question.

Vice Minister of Finance Liao Min:

Thank you to this journalist friend for the question. Deepening the reform of the fiscal and taxation system is not only an important part of comprehensively deepening reforms, but also an inevitable requirement to ensure the smooth progress of reforms in other fields. During the “14th Five-Year Plan” period, the financial department insisted on deepening fiscal and taxation system reform as a main line of work, implementing various reform tasks in a steady and gradual manner, speeding up the formation of a good pattern with more scientific budget management, a more perfect tax system, and a more sound financial system, and providing institutional guarantees for Chinese-style modernization and high-quality development. Below, I will give brief answers on these three aspects.

The first is to identify the three points of “revenue, expenditure, and management” and seek efficiency from the budget system reform. In terms of revenue, the main thing is to strengthen the coordination of financial resources. In the past four years, the amount of funds transferred from government fund budgets and state-owned capital operating budgets to the general public budget at the central level was more than 10 times that of the 13th Five-Year Plan period, enhancing the central financial administration's ability to regulate and guarantee. Establish a comprehensive national pension insurance system, and the transfer scale across provinces will reach 253.3 billion yuan in 2024 to ensure that pensions are paid in full and on time. In terms of expenditure, the main thing is to optimize the expenditure structure. The focus is on making good use of zero-based budget reform as a starting point, distinguishing priorities according to actual needs, using precious funds in critical areas and cutting edges, and implementing the requirements of the Party and government organs to live a busy life. In this regard, many central departments and provinces are actively exploring this area. By advancing zero-based budget reform, breaking the pattern of fixed spending, vigorously integrating special funds, gathering “change money” into “whole money,” and strengthening financial security for major strategic tasks. The management aspect is mainly to improve the efficiency of the use of funds. Strengthen dynamic monitoring of the entire chain of fund use, strengthen budget review and performance evaluation, so that spending money must be effective, and ineffectiveness must be held accountable.

The second is to grasp the three major functions of “promoting high-quality development, social fairness, and market unification”, and to seek vitality in tax reform. For example, in terms of high-quality development, we have fully implemented a pilot water fee tax reform project, promoted the inclusion of volatile organic compounds in the scope of environmental protection tax collection, and strongly promoted the green transformation of the economy and society. For example, in terms of social equity, we have improved the personal income tax system, added a special additional deduction for the care of infants and children under 3 in 2022, and drastically raised the three “one old, one young” special additional deduction standards in 2023, benefiting more than 67 million people. Another example is market unification, standardizing preferential tax policies, speeding up tax legislation, and creating a fair and unified tax environment. Fourteen of the current 18 types of taxes in our country have already been legislated.

Third, with regard to financial system reform, this is also an aspect that the market is very concerned about. We have anchored the three goals of “clear authority and responsibility, coordination of financial resources, and regional balance”, and seek impetus for financial system reform. Better mobilize the enthusiasm of the central government and local authorities, appropriately increase central financial authority and expenditure responsibilities, improve the common financial authority system, and achieve clear powers and responsibilities. Accelerate the reform of the financial system below the provincial level, promote the decline in financial resources, continuously enhance financial security capabilities at the grassroots level, and promote financial coordination. We have optimized the transfer payment system, established and perfected transfer payment incentive and restraint mechanisms and horizontal ecological protection compensation mechanisms to promote high-quality development. Transfer payment management is more scientific, standardized, and effective, which has strongly promoted regional balance. Since the 14th Five-Year Plan, transfers from the central government to local authorities have accumulated nearly 50 trillion yuan, supporting local authorities to better implement the decisions and arrangements of the Party Central Committee.

The Third Plenary Session of the 20th CPC Central Committee made clear arrangements for deepening the reform of the fiscal and taxation system. We have formulated an implementation plan and a yearly work plan, and are making rapid progress. Next, according to changes in the situation, one project will be launched when conditions are ripe. Thank you.

First Financial Correspondent:

During the “14th Five-Year Plan” period, the finance department introduced a series of fiscal and taxation policies to expand domestic demand. How are they progressing? What are some other considerations for the next stage of work? Thank you.

Blue Buddha:

Thank you for your question.

The unique advantage of large economies is that domestic demand is dominated by domestic demand and internal circulation. During the “14th Five-Year Plan” period, we earnestly implemented the strategy of expanding domestic demand, and made concerted efforts from both supply and demand sides to play a series of “combo punches” to promote healthy interaction between consumption and investment, give better play to the main driving force and stabilizing anchor role of domestic demand, and enhance endogenous motivation for high-quality development. Here, I'll give you an introduction from four aspects.

The first is to strengthen the foundation and expand consumer demand in safeguarding and improving people's livelihood. Highlight the use of employment to drive income growth and enhance consumption capacity. We have implemented a series of policies such as job stabilization and employment subsidies. During the “14th Five-Year Plan” period, the central financial administration allocated 318.6 billion yuan in employment subsidy funds, an increase of 29% over the “13th Five-Year Plan” period, and the total number of new jobs added in cities was over 50 million. Improve the social security system, raise the level of protection for the elderly, medical care, social assistance, etc., reduce the worries of ordinary people, and enhance their motivation to spend.

The second is to tap potential, and “real money” stimulates consumption vitality. We strongly support the trade-in of consumer goods. By the end of August this year, the national treasury had allocated a total of about 420 billion yuan, driving sales of various products to over 2.9 trillion yuan. Arrange special funds to support the development of commercial construction activities in counties to guide the release of rural consumption potential. Since the 14th Five-Year Plan, retail sales of consumer goods in rural areas have increased by 24%. We have introduced direct subsidies such as childcare allowances and old-age service allowances to provide interest rates on personal consumption loans in key areas and loans from business entities in related industries, so that resources can be accurately invested in the consumer sector. Improve the duty-free shop policy system to encourage more domestic “trendy products” to go global. Optimize the departure tax refund policy, further reduce the starting and exit points, increase the amount of cash tax rebates, and promote the expansion of inbound consumption.

The third is to overcome blockages and lead high-quality demand with high-quality supply. Play the role of special funds to accelerate research on key core technologies and the transformation and upgrading of key industries. During the “14th Five-Year Plan” period, it supported the market application of more than 30,000 units (sets) of major technical equipment and 190 kinds of innovative material products. Further promote the pilot modern trade circulation system, support 37 cities to strengthen the construction of national integrated freight hubs, and continuously improve the resilience and safety level of the logistics supply chain. Support the promotion of new consumption formats, new models, and new scenarios to enhance the convenience of consumption.

Fourth, increase momentum and take more measures to expand effective investment. In the past two years, we have arranged 1.5 trillion yuan of ultra-long-term special treasury bonds to advance “dual” construction. Over the past five years, a total of 19.4 trillion yuan of local government special bonds have been arranged to support 150,000 construction projects; 3.33 trillion yuan has been allocated within the central budget to support infrastructure construction such as water conservancy and transportation. Use government investment to effectively drive social investment to better make up for shortcomings and increase momentum.

China is the most growing hyperscale market in the world. The acceleration of new industrialization and the steady development of urbanization can drive large-scale investment demand, and domestic demand has huge room for growth.

Next, in accordance with the decisions and arrangements of the Party Central Committee and the State Council, we will innovatively use fiscal and taxation policy tools to stimulate potential consumption, expand effective investment, develop the “bonanza” of domestic demand, and play a good driving role to add momentum and vitality to high-quality development.

Thank you.

Economic Daily reporter:

China's science and technology have been very popular in the past two years, and a series of scientific and technological achievements have been remarkable. Can you explain what measures the Ministry of Finance has taken in the past few years to support self-reliance and self-improvement in high-level science and technology, and promote the better transformation of scientific and technological achievements into productivity? Thank you.

Blue Buddha:

Vice Minister Wang Dongwei was asked to answer this question.

Vice Minister of Finance Wang Dongwei:

Thank you for your question. Chinese-style modernization is supported by technological modernization, and achieving high-quality development depends on scientific and technological innovation to cultivate new momentum. The country's financial coordination uses various policy tools to vigorously promote self-reliance and self-improvement in high-level science and technology, and promote the integrated development of scientific and technological innovation and industrial innovation.

The first is to “add fuel and fire” to capital investment. During the “14th Five-Year Plan” period, the country's financial expenditure on science and technology is expected to reach 5.5 trillion yuan, an increase of 34% over the “13th Five-Year Plan” period. The capital will focus on basic research, applied basic research, and national strategic science and technology tasks. Among them, the total investment in basic research reached 730 billion yuan, an average annual increase of 12.3%. Financial investment has driven the rapid growth in R&D investment of the whole society. The investment intensity increased from 2.41% at the end of the 13th Five-Year Plan period to 2.68% in 2024, ranking second in the world in terms of R&D investment.

The second is “decentralization and unbundling” in the use of funds. In recent years, we have been exploring ways to manage technology funding. The general direction is to adapt to the general rules of scientific and technological innovation, so that scientists have more power to decide on technology routes, have more control over funds, and have more power to dispatch resources. For example, implementing a “package management system” in basic research projects, the project leader decides how to use the funds. At the same time, we are also continuously improving supervision methods, doing a good job of performance evaluation, and improving the efficiency of science and technology capital expenditure.

The third is to “build a bridge” for the transformation of results. The role of scientific and technological innovation and the value of scientific research results are ultimately reflected in actual productivity. Since the 14th Five-Year Plan, we have continued to adjust and improve relevant policies, so that researchers can enjoy ownership or long-term use of scientific and technological achievements, and fully share the benefits of the transformation of scientific and technological achievements. Innovate government procurement systems and use government “order placement” guidance to support product innovation and promotion and application. We have also implemented the first (package) and first batch of insurance compensation policies to promote the iterative upgrading of innovative products. The implementation of these policies has greatly supported the results of scientific and technological innovation to come out of laboratories more quickly, turn samples into products, and form industries.

Fourth, “empower and reduce the burden” by strengthening the dominant position of enterprises in innovation. Whether it is the original innovation “from 0 to 1” or the implementation of the “1 to 100” industry, enterprises play an irreplaceable and important role. We have introduced a series of fiscal and taxation policies to help enterprises reduce costs, expand applications, and transform and upgrade. For example, since the “14th Five-Year Plan”, we have implemented a financial reward policy for specialized and new small and medium-sized enterprises, supporting the cultivation of 14,600 “little giant” enterprises; new tax cuts and fees for technological innovation and advanced manufacturing development have reached a total of 3.6 trillion yuan; government financing guarantees have supported more than 300,000 small and medium-sized science and innovation enterprises to obtain loans of about 800 billion yuan, and the average guarantee rate for insured enterprises has dropped below 1%.

In the next step, we will continue to increase financial support, focus on improving the effectiveness of investment in science and technology, better implement innovation-driven development strategies, and accelerate the construction of a science and technology powerhouse. Thank you!

Dazhong News Dazhong Daily Reporter:

In recent years, finance has introduced many policies to support education, and recently key steps have been taken in promoting free preschool education. What progress has finance made in supporting the high-quality development of education? Thank you.

Blue Buddha:

Let's ask Vice Minister Guo Tingting to answer.

Vice Minister of Finance Guo Tingting:

Thank you to this reporter for the question.

During the “14th Five-Year Plan” period, national financial investment continued to increase, supporting China to build the largest education system in the world and promoting high-quality education development. It is mainly reflected in the following aspects.

First, there is a steady increase in the scale of investment, and the education level of the entire population continues to rise. By the end of 2024, the country's financial expenditure on education as a share of GDP had remained above 4% for more than 10 years. During the “14th Five-Year Plan” period, the country's financial investment in education is expected to exceed 25 trillion yuan, an increase of about 38% over the “13th Five-Year Plan” period. Education coverage at all levels in China has reached or surpassed the level of middle- and high-income countries. In 2024, the consolidation rate for compulsory education was 95.9%, and the gross enrolment ratio for higher education was over 60%; the average length of education for the working-age population reached 11.21 years, 0.41 years higher than at the end of the 13th Five-Year Plan.

Second, the expenditure structure has been further optimized, and key areas of education have been consolidated and improved. It mainly reflects the three “key points”. The first priority is to guarantee compulsory education. During the “14th Five-Year Plan” period, the central financial administration arranged a total of 1.1 trillion yuan in transfer funds, which encouraged local authorities to continue to increase investment in compulsory education. More than half of the country's financial education expenditure is spent on compulsory education, which strongly guarantees the high-quality and balanced development of compulsory education. The second focus is on favoring the central and western regions. The central financial administration transfers more than 80% of education transfers to the central and western regions to support the central and western regions to significantly improve teaching conditions and quality. The third focus is to support the construction of a team of highly qualified and specialized teachers, increase funding guarantees, and implement national-level training, improving the quality of teachers in vocational colleges, and teacher training programs. In 2024, 86% of full-time teachers in compulsory education had a bachelor's degree or above, an increase of about 12 percentage points over the end of the 13th Five-Year Plan.

Third, student financial aid policies have been adjusted and improved, and the fairness and accessibility of education have been further improved. During the “14th Five-Year Plan” period, the central government allocated about 130 billion yuan a year to distribute national scholarships, bursaries, etc. to students at all levels, benefiting about 150 million students. The national student loan interest-free and principal deferred repayment policy has been implemented for four consecutive years. Last year, standards and quotas were drastically raised for national scholarships and bursaries, and the amounts and interest rates for national student loans were raised. It can be said to be the most vigorous and wide-ranging adjustment in recent years, benefiting 34 million students, so that children can study with peace of mind.

Fourth, the quality and efficiency of investment have been significantly enhanced, and education has achieved contextual development. Financial investment balances “hardware” and “software” investment to promote the improvement of the conditions for running schools and the improvement of the quality of education in an integrated manner. In terms of improving the conditions for running schools, we coordinate all kinds of financial resources, support the construction, renovation and expansion of necessary school buildings, update equipment for teaching, research and practical training, etc., and raise the level of education informatization, etc. At present, the national campus network access rate has reached 100%. In terms of improving the quality of teaching, we will develop first-class subject training, support the establishment of 14 national high-level talent training centers in mathematics, physics, and chemistry, accelerate the construction of world-class universities and dominant disciplines with Chinese characteristics, and improve the quality of independent talent training. The number of science, technology, engineering and mathematics (STEM) college graduates in China exceeds 5 million every year, ranking first in the world. At the same time, we are promoting the construction of high-level vocational schools and majors with Chinese characteristics, exploring the establishment of a differentiated average student funding system for vocational education based on major categories of majors, comprehensively considering factors such as the cost of running schools and the economic and social development needs of each major, and determining funding standards by classification and classification to promote a close connection between professional layout and industrial structure. Currently, in fields such as modern manufacturing, more than 70% of new frontline workers come from vocational schools.

The report of the 20th National Congress of the Party proposed building an educational power by 2035. The national treasury will continue to strengthen investment in education, further protect the basics, make up for shortcomings, promote fairness, and improve quality, and better meet the people's expectations from “being educated” to “being good at school.”

Thank you.

Reuters Reporter:

I want to ask how our fiscal policy during the “14th Five-Year Plan” period supports economic growth while controlling the level of government debt? Also, after introducing the 10 trillion local hidden debt replacement policy last year, what is the current state of hidden local debt? Also, what is the state of rectification of local financing platforms? Finally, I would like to ask, there is currently some downward pressure on the economy. In this context, how can fiscal policy ensure the achievement of this year's growth target? Thank you.

Blue Buddha:

You asked a question that is of great concern to all parties. In the fourth quarter of last year, in accordance with the decisions and arrangements of the Party Central Committee and the State Council, we launched a package of debt conversion measures. Overall, the measures have been implemented as scheduled and continue to show results. By the end of August this year, the one-time increase in the special debt limit of 6 trillion yuan had been issued, and a total of 4 trillion yuan had been issued. After local replacements, the average interest cost of debt was reduced by more than 2.5 percentage points, which could save more than 450 billion yuan in interest expenses. Since this year, the country has issued an additional 2.78 trillion yuan of local government special bonds, of which 800 billion yuan has been allocated to supplement the financial resources of government funds and specifically support local debt conversion.

This series of measures, combined with various policies and measures adopted earlier, promoted the gradual reduction of local government debt risks. By the end of 2024, China's total full-caliber debt was 92.6 trillion yuan, including 34.6 trillion yuan of treasury bonds, 47.5 trillion yuan of statutory debt of local governments, and 10.5 trillion yuan of hidden local government debt. The government debt ratio was 68.7%. According to a report released by the IMF in April this year, the average government debt ratio of G20 countries is 118.2%, and the average government debt ratio of G7 countries is 123.2%. At the same time, our government debt corresponds to a large number of high-quality assets. Overall, our government's debt ratio is within a reasonable range, and risks are safe and manageable.

Debt conversion is a means; development is the goal. We adhere to the two-pronged approach of debt conversion and development to effectively promote a virtuous cycle of economic development and debt management. First, it has boosted local development momentum. Debt conversion has opened up the capital chain, freeing up more financial resources, time, energy, and policy space for solving the blockages, pain points, and difficulties in economic development. Second, it has spurred the speedy withdrawal of financing platforms. By the end of June 2025, over 60% of financing platforms had withdrawn, which meant that more than 60% of the hidden debts of financing platforms had been cleared, and the reform and transformation of financing platforms was advancing at an accelerated pace. Third, the financial environment has been improved. The asset quality of financial institutions has been improved, risks have been significantly reduced, and their willingness and ability to invest in credit in the real economy has increased markedly.

During the “15th Five-Year Plan” period, we will continue to coordinate development and security, speed up the establishment and improvement of a government debt management mechanism compatible with high-quality development, develop in the development of chemical bonds and chemical bonds, and provide strong support for the steady and far-reaching economy.

First, subtract the stock. Continue to implement a package of debt conversion measures, issue part of the 2026 additional local government debt limits ahead of time, use the credit limit ahead of time, and take more measures to resolve the hidden debt stock.

Second, do addition in terms of management. Strict local government debt limit management to ensure good use, affordability, and sustainability. Strengthen the full life cycle management of “borrowing and repayment” of special debt, promote the “dual track” merger management of hidden debt and legal debt, and establish a unified long-term supervision system. Strengthen the disclosure of debt information in accordance with the law and enhance management transparency.

Third, do multiplication in terms of benefits. Scientifically arrange the size and structure of bonds, reasonably grasp the timing and pace of issuance, guarantee capital requirements for major projects and key areas, improve the performance of the use of bond funds, and make better use of the driving amplification effect of government bonds.

Fourth, divide the risk. Strengthen risk monitoring and early warning, and expand “repairing gaps in firefighting” to “preventing problems before they occur” in advance. Improve the management mechanism for special bond repayment provisions to prevent payment risks. Maintain a “zero tolerance” high-pressure supervision trend, transmit pressure at various levels, strictly implement lifelong accountability and debt investigation mechanisms, and resolutely curb new hidden debts.

Your concern about how to ensure the achievement of this year's economic growth target was explained earlier when introducing the next step in fiscal policy, and I won't go into detail here. Thank you.

Poster News Reporter:

The “14th Five-Year Plan” is an important transition period for consolidating and expanding the achievements of poverty alleviation and effective links with rural revitalization. It is now nearing its end. Can you tell us about the results of the work of consolidating the link between financial support and financial support since the transition period? Thank you.

Blue Buddha:

Vice Minister Wang Dongwei was asked to answer this question.

Wang Dongwei:

Thank you for your question.

Since the 18th National Congress of the Party, the Party Central Committee, with Comrade Xi Jinping at the core, has used the strength of the whole Party and society to comprehensively win the fight against poverty at the end of 2020, historically solved the absolute poverty problem that has plagued the Chinese nation for thousands of years, provided a model for the global cause of poverty reduction, and won wide praise from the international community.

After the overall victory in the fight against poverty, the Party Central Committee decided to establish a five-year transition period to link the consolidation and expansion of the achievements of the fight against poverty with rural revitalization, and to support the poverty-stricken regions and the people who have escaped poverty. The Ministry of Finance resolutely implemented it without compromise: the first is to insist that policies remain unchanged and vigorous during the transition period, ensure investment through multiple channels, and effectively prevent large-scale returns to poverty. The second is to insist on stimulating endogenous motivation in poverty-alleviation regions, teaching people to “fish” and “fish” to enhance development momentum. The third is to insist on improving development conditions in poverty-stricken areas and take multiple measures to promote comprehensive rural revitalization. Overall, it has achieved results in three areas.

First, the bottom line for preventing and returning to poverty has been kept more “tight”, and the results of poverty alleviation have been consolidated more realistic. The central government established a joint subsidy fund to promote rural revitalization. The scale increased from 156.5 billion yuan in 2021 to 177 billion yuan in 2025. The total amount over five years reached 85.5 billion yuan, an increase of 320 billion yuan over the “13th Five-Year Plan” period, an increase of 60%. Establish and improve monitoring and support mechanisms to prevent people returning to poverty and eliminating risks in a stable manner. Poverty alleviation regions have withstood multiple tests such as pressure on economic development and frequent disasters in some regions, and there have been no large-scale returns to poverty.

Second, they have more momentum for their own development, and the income of people who have escaped poverty is more stable. Industries with rural characteristics and advantages continue to develop and expand. Basically, every poverty-alleviation county has cultivated industries with obvious characteristics, outstanding advantages, and strong driving ability. For example, small fungus from Xishui County in Shaanxi, small yellow flowers in Yunzhou District of Datong City, Shanxi Province, and small potatoes from Anding District in Dingxi City, Gansu have all made great achievements, and have established a relatively close benefit-linking mechanism with poor households, so that farmers can work and earn money, and allow rural areas to gather popularity and retain talents, and develop and be sustainable after getting out of poverty. In order to guarantee an increase in farmers' income and agricultural production, the financial support for the expansion and upgrading of agricultural insurance bids has now achieved full coverage of the costs and planting income insurance for the three major staple foods throughout the country. Since the 14th Five-Year Plan, the per capita disposable income of rural residents in poverty-alleviation areas has increased by nearly 40%, reaching 17,522 yuan in 2024. The average annual growth rate has been higher than the per capita disposable income growth rate of national residents for 4 consecutive years.

Third, people's livelihood security is more complete, and rural revitalization has a brighter undertone. Since the transition period, the rural highway landscape in poverty-alleviation areas has been improving. The development quality and service capacity of the “Four Good Rural Roads” have continued to improve. Rural revitalization has focused on helping counties achieve 5G access to rural areas, opening up the “main artery” of economic development. Burdens such as medical expenses have continued to be reduced, and people's livelihood security has been strongly strengthened. The renovation of dilapidated houses and drinking water security in rural areas have been advanced in depth, and rural infrastructure construction has caught up with great strides.

In the next step, we will give full play to the role of finance, fully support the completion of the transition period, plan normalized support work after the transition period, and ensure that no one is left behind on the road to common prosperity. Thank you.

China Securities News Reporter:

Facing the turbulent and intertwined international situation, deepening foreign exchanges and cooperation in the financial field is an important gripper for promoting China's high-quality development and high-level openness. What results did the financial department achieve in international financial cooperation during the “14th Five-Year Plan” period? Thank you.

Blue Buddha:

Vice Minister Liao Min is invited to answer this question.

Liao Min:

Thank you for your question. Looking back over the past few years, the Ministry of Finance has actively carried out international financial cooperation, fully served the head of state's diplomacy, strongly expanded the new international space for China's high-quality development with pragmatic achievements in the financial field, and is playing an increasingly important role in promoting sustainable and inclusive global development. Let me introduce you to the following three aspects of the situation.

The first is to continue to push for reforms in global economic governance. We firmly uphold the international system with the United Nations at its core, promote governance reforms in multilateral institutions such as the World Bank, and enhance the voice and representation of developing countries. Work with the international community to actively guide the formulation of G20 rules for dealing with the sovereign debt of developing countries. Deeply participate in negotiations on a two-pillar solution for international tax rules. We support improving rules such as environmental information disclosure and green bond standards.

The second is to focus on strengthening international macroeconomic policy coordination. We actively respond to global economic growth and development challenges, and enhance coordination of international macroeconomic policies through multilateral “anchoring” and bilateral “bridging”. On the one hand, use multilateral “anchors” to give full play to the role of multilateral financial dialogue platforms and forge more consensus. Substantial progress has been made in promoting the establishment of the Shanghai Cooperation Organization Development Bank. In 2025, as the co-chairman of the financial cooperation mechanism between ASEAN, China, Japan, and South Korea, he led discussions on major financial issues for the first time. Make full use of the G20 finance ministers and central bank governors meeting mechanism to maintain global economic and financial stability. Next year, China will be the host country of APEC, and we will work with all member countries to promote the mechanism to play a better role in the financial field. On the other hand, we are “building bridges” on both sides to expand the “circle of friends” and expand new space for international cooperation. We fully serve and participate in Sino-US economic and trade negotiations, manage differences, and help stabilize bilateral economic and trade relations. Give full play to the role of the Ministry of Finance's dialogue mechanism office between the Chinese and British, Chinese, German, and Chinese and French vice-prime ministers to consolidate and deepen economic and financial cooperation between China and Europe. Strengthen communication and coordination with developing countries on important international financial issues through bilateral financial dialogue mechanisms such as China, Russia, China and Saudi Arabia (Spain), and China and Brazil (West).

The third is to effectively promote common global development. Continuously improve the “Belt and Road” investment and financing system, optimize infrastructure construction standards, support the promotion of a number of iconic projects, and incubate many “small but beautiful” livelihood projects. Promote the steady operation of new types of multilateral development institutions such as the AIIB and the New Development Bank. Take the AIIB as an example. Since its establishment in 2015, a total of 322 projects have been approved and implemented, benefiting 38 members within and outside the region; more than 51,000 kilometers of transportation infrastructure have been built and renovated, making it more convenient for 41 million people to travel.

In the next step, we will always practice true multilateralism, adhere to the shared concept of global governance through joint discussion, adhere to the three principles of mutual respect, peaceful coexistence, and win-win cooperation, promote the construction of an open world economy, and continue to write a new chapter of mutual benefit and win-win situation. Thank you.

Xiaoli Shou:

Keep asking questions. Two other reporters raised their hands, last two questions.

Daily Economic News Reporter:

In recent years, financial supervision has become a “key word.” Can you explain what progress has been made in financial supervision during the “14th Five-Year Plan” period? Thank you.

Blue Buddha:

Please ask Vice Minister Guo Tingting to answer.

Guo Tingting:

Thank you to this reporter for the question. Financial supervision is an important part of the Party and state supervision system. Since the Central Office and the State Office issued “Opinions on Further Strengthening Accounting Supervision” in 2023, all sectors of society have paid more attention to this work, and the finance department, as the responsible department, has also taken greater responsibility. Over the past few years, we have continued to strengthen the institutional mechanism for financial supervision, increase our financial supervision efforts, and have achieved positive results. It is mainly reflected in the following aspects:

The first is to carry out in-depth special financial regulation to ensure the effective implementation of the decisions and arrangements of the Party Central Committee. This is the most important task of financial supervision. Over the past few years, we have focused on implementing active fiscal policies, focusing on strengthening supervision and inspection on the use of additional treasury bonds, management of local government debt, tax rebates, etc., and rigorously investigate and quickly resolve the problems discovered, so that all policies benefiting enterprises and the people can fully unleash their effectiveness.

Second, resolutely crack down on financial fraud and maintain a healthy, fair, and orderly market economy order. Financial accounting information is a common commercial language. Its content is untrue, and the quality is high or not. It is directly related to the stability of the capital market, the development of business entities, and the vital interests of investors. We continue to strengthen supervision of accounting, asset evaluation and other industries. Over the past two years, we have carried out practice quality inspections on more than 4,600 accounting firms and nearly 1,500 asset evaluation agencies, seriously investigating and punishing acts such as financial fraud and accounting fraud. At the same time, we are actively promoting the improvement of regulatory systems such as the Accounting Law and the Certified Public Accountants Law to create a market ecosystem that respects the law and operates in good faith.

The third is to normalize and strengthen budget execution and supervision, so that the use of financial funds is more standardized, efficient, and safe. We have improved and perfected an integrated budget management system, established a full-coverage supervision system for central departmental budgets and transfer funds. At the same time, we are actively exploiting the nearby supervision advantages of the Ministry of Finance's local supervisory authorities, continuously hardening budget constraints and strengthening budget execution, and promoting compliance and effective use of funds.

Fourth, strengthen the integration and coordination of financial supervision with other types of supervision to form joint supervisory efforts. We consciously plan and promote financial supervision within the Party and State supervision system, take the initiative to strengthen coordination and coordination with discipline inspection, inspection, etc., and further enhance the effectiveness of financial supervision through information sharing and work collaboration.

In the next step, the financial department will resolutely carry out its primary responsibility for financial supervision, further enhance the authority and effectiveness of financial supervision, strengthen deterrence and risk prevention, push all parties to more strictly abide by financial regulations, more effectively implement the decisions and arrangements of the Party Central Committee, maintain the order of the market economy more effectively, and protect high-quality economic and social development. Thank you.

Xiaoli Shou:

OK, one last question.

Beijing Daily Reporter:

Minister Lan mentioned earlier that people's livelihood has always been the heaviest and most successful part of a country's financial ledger. The “14th Five-Year Plan” is the first five years of fully building a well-off society. The people have more expectations for a better life. I would like to ask what work the Ministry of Finance has done to protect and improve people's livelihood? Thank you.

Blue Buddha:

Thank you for your question. The word people's livelihood is as important as it is. Enabling people to live a happy life is our top priority. Since the 14th Five-Year Plan, the state finance has insisted on safeguarding and improving people's livelihood through high-quality development. Financial investment in the field of people's livelihood accounts for more than 70% of the country's general public budget expenditure, and more capital has been used more and more directly on ordinary people. Over the years, we have sought to achieve four “highlights”.

The first is to highlight more fairness, tighten the “safety net”, and continuously expand the scope of coverage and raise the level of protection. Up to now, the number of people participating in basic pension insurance nationwide has exceeded 1.07 billion, the number of people participating in basic medical insurance has reached 1,327 billion, and more than 45 million people have received basic living assistance. China has built the largest and fully functional social security system in the world. Not only is the scope of coverage getting wider, but the level of coverage is also constantly improving. During the “14th Five-Year Plan” period, the financial subsidy standard for residents' health insurance was increased from 580 yuan to 700 yuan per person per year; the national subsistence insurance standard was raised by about 20% in rural and urban areas. At the same time, we are also innovating and establishing a mechanism for rapid disbursement of disaster relief funds. A total of 2.59 trillion yuan was allocated during the “14th Five-Year Plan” period, making every effort to help the masses fight disasters and resume their production and life.

The second is to highlight more balance, adjust the “balance scale”, and promote broadly equal enjoyment of basic public services between urban, rural areas, and regions. Increased policy and resource preferences for underdeveloped regions. During the “14th Five-Year Plan” period, the scale of balanced transfers increased from 1.9 trillion yuan in 2021 to 2.7 trillion yuan in 2025, with an average annual increase of 9.6%. Shortfalls in basic public services in rural areas are being filled up as soon as possible. Up to now, more than 500,000 formed villages in China have all passed through hardened roads. The coverage rate of express delivery services exceeds 95%, the tap water penetration rate has reached 94%, and the domestic waste collection, transportation and treatment ratio has reached more than 90%. The city's basic public services continue to improve. For example, support the raising of about 7.8 million affordable housing units of various types, and the renovation of 160,000 old neighborhoods to help disadvantaged urban people to “live and live.”

The third is to highlight more inclusiveness, widen “drip irrigation channels”, and promote the expansion and decline of public resources such as education and medical care. All compulsory education students in urban and rural areas are exempt from tuition and miscellaneous fees and receive free textbooks; about 20 million students from economically disadvantaged families receive living allowances; and about 13 million migrant children of workers entering the city can carry relevant education expenses. The fall semester, which has just started school, has also been exempted from childcare fees for large kindergarten classes, which is expected to benefit 12 million children. A total of more than 80 billion yuan has been allocated to support key clinical specialties and regional medical capacity building, strengthen the training of health personnel at multiple levels, and improve the service capacity of various medical and health institutions at all levels. The Party's good policies truly benefit thousands of households.

Fourth, highlight more accessibility, create a “circle of happiness”, and better meet the diverse needs of people's livelihood at their doorstep. Since the “14th Five-Year Plan”, direct settlement for medical treatment from other places across provinces has been actively promoted, benefiting 560 million people and reducing advance funds from the public by 590 billion yuan. Explore service models such as home care and nursing care, and support the development of child-friendly and age-appropriate transformation of old neighborhoods. It supports the opening of nearly 50,000 public libraries and museums to the public for free, and many of them have become popular places to check in and relax.

There is no end to people's livelihood and welfare; continuous efforts and long-term efforts are required. During the “15th Five-Year Plan” period, we will stick to putting the people at the center, effectively safeguarding and improving people's livelihood, so that no matter where the people look forward to a better life, financial resources will be invested where; where the masses are anxious and hopeful, fiscal policies will be strengthened. Thank you.

Xiaoli Shou:

Thank you Minister Lan Foan, thank you to all the publishers, and thank all our reporters and friends for participating. That's all for today's press conference. Bye everyone!

This article was edited by China Network; Zhitong Finance Editor: Chen Xiaoyi.