On October 12, the highly anticipated State Council Information Office press conference was held. The Ministry of Finance introduced the relevant situation of "strengthening the counter-cyclical adjustment of fiscal policy and promoting high-quality economic development". Let's take a look at the main content and related interpretations of the press conference.
01. Key points of the press conference
It is planned to increase the debt limit on a large scale at one time, replace the existing hidden debt of local governments, and increase support for local governments to resolve debt risks. This policy, which is about to be implemented, is the most powerful measure to support debt reduction in recent years.
Other policy tools are also being studied. For example, the central government still has a lot of room for debt and deficit increase.
We will make good use of special bonds to purchase existing commercial housing, appropriately reduce the scale of new construction, and support local governments in purchasing more houses by digesting existing houses.
We are working hard to study and clarify and cancel the value-added tax policy that aligns the standards for ordinary residential and non-ordinary residential properties.
The next step for special bonds is to study the expansion of the scope of special bonds and improve the management mechanism. In terms of expanding the scope, first, we will study and improve the management of the list of special bonds to increase the use of special bonds as project capital, second, use special bonds to support the acquisition of existing commercial housing for use as affordable housing, and third, support forward-looking and strategic emerging industries.
The Ministry of Finance will issue special government bonds to support large state-owned commercial banks in replenishing capital.
It is planned to launch a number of reform measures that are mature, achievable and feasible in the next two years.
Places with conditions are encouraged to make full use of idle assets, strengthen the management of state-owned capital income, and strive to increase fiscal revenue.
In the next step, we will continue to adhere to precise policies and targeted efforts, improve residents' income expectations, stimulate consumption potential, make good use of special funds, loan interest subsidies and other tools, drive effective investment, and expand domestic demand.
Support local governments in using special bonds to recover eligible idle stock land and enhance the ability to regulate land supply.
According to the total amount of financial resources at the grassroots level across the country, the bottom line of the "three guarantees" at the grassroots level is guaranteed. Taking 2023 as an example, the expenditure on the "three guarantees" at the grassroots level accounts for about 50% of the available financial resources. If some rigid expenditures are added, it will account for about 80% of the available financial resources. The next step will be to study and formulate a list of "three guarantees" and actively build a long-term mechanism to ensure the bottom line of the "three guarantees" at the grassroots level.
In 2024, the minimum standard for basic pensions for urban and rural residents was further raised, with the largest increase in adjustments ever. The overall pension level for retirees will increase by about 3%.
In 2024, the number of national scholarship awards will double, from 60,000 to 120,000 per year for undergraduate students, from 35,000 to 70,000 per year for master's students, and from 10,000 to 20,000 per year for doctoral students.
02 Urgent interpretation by the agency!
As the press conference ended, relevant agencies also made urgent interpretations.
The macro research team of Tianfeng Securities released a research report stating that judging from the policy content announced at the press conference, it is almost the maximum policy support that the Ministry of Finance can give within its authority. The most important thing is not how many trillions of yuan its specific scale is, but that it has established a signal of shifting back from contractionary fiscal policy to expansionary fiscal policy.
Tianfeng Securities believes that the market still has some doubts about the Ministry of Finance's failure to give a specific amount of additional treasury bonds, but the policy of this press conference is the best answer that the Ministry of Finance can give within its authority. The issuance of additional treasury bonds involves budget adjustments and must be approved by the Standing Committee of the National People's Congress, otherwise it will violate legal procedures. The Ministry of Finance was able to give advance notices and hints before the process was completed, and its attitude was obviously positive, and the signal was of great significance. In terms of amount, last year's fiscal deficit was 798.1 billion yuan, and 500 billion yuan of the additional 1 trillion yuan of treasury bonds were used last year, accounting for about 63% of last year's fiscal deficit. According to the same proportion, this year's fiscal deficit is about 3 trillion yuan, and it is estimated that this year may need to issue about 2 trillion yuan of treasury bonds.
Mingming, chief economist of CITIC Securities, said that from the perspective of local debt management, debt reduction will be the focus of this round of fiscal policy. At the press conference, the Ministry of Finance plans to increase the debt limit on a large scale at one time to replace the existing hidden debt of local governments. This move will greatly reduce the debt pressure of local governments, which is conducive to local governments' economic development and support for the "three guarantees". In terms of fiscal revenue and expenditure and deficit, the central government still has a large room for debt and deficit increase, which means that the fiscal budget deficit rate next year may have a significant breakthrough.
Mingming believes that completing the general public budget means that the deficit ratio this year may increase slightly, and completing the government fund budget means that local government bond issuance will increase significantly at the end of the year. The scale of these policy tools may be clarified at the next NPC Standing Committee meeting.
Wang Qing, chief macro analyst at Orient Securities, said that we judge that the incremental scale of fiscal policy in this package of incremental policies will be no less than 4 trillion yuan, exceeding market expectations. This will directly push the GDP growth rate in the fourth quarter to above 5.0%, thereby smoothly completing the annual growth target of "around 5.0%", and provide important support for maintaining a relatively fast economic growth of around 5.0% next year.
The article is reprinted from Snowball!
