China’s Economy Achieves Remarkable Results Through Fiscal and Monetary Policies
In 2023, China’s economy achieved remarkable results despite facing a complex domestic and international situation. The country’s proactive fiscal policies and prudent monetary policies played a significant role in driving economic growth and supporting the real economy.
The RMB loans to the real economy increased by more than 22 trillion yuan, and new tax cuts, fee reductions, and tax rebates and fee deferrals exceeded 2.2 trillion yuan. These initiatives provided strong protection for people’s livelihood and investment.
Proactive fiscal policies have benefited enterprises and the people, creating a significant impact. Advanced manufacturing companies and companies in integrated circuit and industrial machine industries benefited from the implementation of a super deduction policy for value-added tax and increasing the super deduction ratio for R&D expenses. These policies have given enterprises confidence and room to invest in new equipment and technologies.
Furthermore, transfer payments from the central government to local governments exceeded 10 trillion yuan for the first time, and funding for basic public health services and per capita financial subsidies for urban and rural residents’ medical insurance increased. The government also invested in energy-saving renovations, providing a warmer living environment for residents and contributing to clean heating in selected pilot cities.
In terms of monetary policy, the People’s Bank of China lowered the deposit reserve ratio twice, releasing a total of more than 1 trillion yuan in liquidity. There was also an increase in financial resources for key areas of the real economy, such as strategic emerging industries and manufacturing. As a result, China’s RMB loans to the real economy increased by 22.22 trillion yuan in 2023, supporting economic recovery.
Looking ahead to 2024, China aims to maintain necessary expenditure intensity, improve financial efficiency, and focus on precision tax cuts and fee reductions to support technological innovation and manufacturing development. The prudent monetary policy will be flexible, appropriate, precise, and effective, targeting sustainable and rapid growth in social financing.
The combination of active fiscal policies, prudent monetary policies, and targeted investments in key areas all contribute to a solid foundation for China’s economic recovery and high-quality development. The country continues to intensify macroeconomic control to promote economic stability and long-term development.