The Premier's mid year speech revealed important signals regarding the economic situation, investment situation, and local fiscal pressure
We should pay attention to the necessary investment, and let the market take the initiative to increase investment and promote employment.
On the evening of July 28, the Chinese government website made public the speech made by Premier Li Keqiang of the State Council on June 25 at the national teleconference on deepening the reform of "management and service" and optimizing the business environment.
It comes at a time when the mid-year data are released to set the tone for economic work in the first half of the year, as well as the deployment of economic work in the second half of the year. Some signals can be gleaned from this speech by the Prime Minister.
Li Keqiang said that in the face of the complicated international situation and the downward pressure on the domestic economy, we have always maintained strategic determination, insisted on not engaging in "flooding"-style strong stimulus, and vigorously deepened reform and opening up. One of the key measures is to continue to promote "Release, control and service" reform. This is actually an inward government self-revolution, which aims to reshape the relationship between the government and the market, make the market play a decisive role in the allocation of resources, and better play the role of the government.
Regarding the current economic situation, Li Keqiang said that since the beginning of this year, my country's economic operation has been generally stable, and positive factors in development have increased, but uncertain and unstable factors are also increasing, especially the rise in external environmental challenges has become the biggest uncertain factor. The situation of stable operation is still unstable and faces new downward pressure. To deal with these risks and challenges is basically to do our own business well and keep the economy running smoothly.
In the first half of this year, the national investment growth rate was 5.8, which was lower than that in the first quarter, but 0.2 percentage points higher than that in the previous five months. Among them, infrastructure investment (excluding electricity, heat, gas and water production and supply) increased by 4.1 year-on-year.
Regarding the current investment situation, Li Keqiang said that investment grew steadily in the first quarter of this year, but the growth rate has declined in the last two months. We must change the development mode and promote economic transformation and upgrading. We must not rely too much on investment, but effective investment is still necessary. Expanding investment is not just by investing money. One of the reasons why some investments cannot form physical quantities on time and do not support the economy is that there are many approval links and slow time, which leads to the delay in starting the project. Safety and other necessary conditions should be considered in the construction of the project. Under this premise, the approval time should be shortened through reform.
Li Keqiang also said that in the current situation where the economy is facing downward pressure, the necessary investment projects should be grasped, and effective investment should be expanded around the short board areas and people's livelihood expectations. However, it is more important to optimize the "soft environment" of institutional and institutional nature through the reform of "release, management and service", so that market entities can actively increase investment and promote employment, this is more sensitive, stable and effective than direct government work.
The scale of tax cuts in the first half of this year exceeded one trillion yuan, and the scale of tax cuts for the whole year may exceed the scale of the 2 trillion proposed at the beginning of the year. Under the downward pressure on the economy and the comprehensive effect of large-scale tax reduction policies, the growth rate of fiscal revenue in some provinces slowed down in the first half of the year, or even showed negative growth, and the contradiction between local fiscal revenue and expenditure increased.
Regarding tax cuts and fee reductions, Li Keqiang said in his speech that some time ago he went to several provinces for research, and enterprises generally reflected that tax cuts and fee reductions are the most direct, fair, inclusive and effective way for us to deal with risk challenges and withstand the downward pressure on the economy. Although the intensity of tax cuts in different industries is different, enterprises of all types of ownership are treated equally, and they will soon be in place, which has played a great role in stabilizing the economy in the first half of the year.
Li Keqiang also pointed out that in the process of reducing taxes and fees, there have indeed been some local fiscal revenue and expenditure contradictions, some of which are more prominent. This year, the central government has raised more than 1 trillion yuan in various ways, and local governments have also taken measures such as turning over the profits of specific state-owned enterprises and replacing state-owned assets. No matter how difficult the financial situation is, we must ensure that the tax and fee reductions fall into place, never increase the charging items, and never let unreasonable charges offset the effect of the tax and fee reduction policy. Some local governments set thresholds for enterprises and irregular supervision, in fact, to increase non-tax revenue. If some places do not use specific income but rely on fees to lead to abnormal growth of non-tax income, the effect of tax reduction and fee reduction will be offset, which to a large extent also reflects that the reform of "management and service" is not in place. Therefore, tax reduction and fee reduction should be promoted in coordination with the reform of "release, management and service", and efforts should be made to clean up all kinds of approval and licensing matters, standardize regulatory behavior, control all kinds of unreasonable charges, and form a joint force to optimize the business environment.
The reform of the management service is an important measure to realize the "six stability" and do our own business well. Li Keqiang said that the current international competition is becoming increasingly fierce. To cope with the increasing external uncertainties and unstable factors, we must fundamentally rely on our own affairs, stimulate the vitality of market entities, and enhance the competitiveness of market entities., To tap the market potential, especially the potential of domestic demand.
Information source: China Government website
Editor He Yang of this website/Organizing
