Cailianshe news on October 12th, the State Council Information Office held a press conference at 10 a.m. today to introduce the "intensification of fiscal policy counter-cyclical adjustment, and promote high-quality economic development" situation, with Minister of Finance Lian Fu'an answering questions from reporters.

BlueFocus: issued new special bonds worth 3.6 trillion yuan from January to September.

Finance Minister Lian Fu'an stated at the State Council Information Office press conference that since the beginning of this year, the finance department has adhered to an active fiscal policy, moderately increased efforts, and improved quality. Actively expanding domestic effective demand, issuing 3.6 trillion yuan of new special bonds from January to September, supporting over 0.03 million projects, with capital for projects exceeding 260 billion yuan.

Lan Fo'an: In 2024, the central government will arrange over 10 trillion yuan for local transfer payments.

Lian Fu'an stated that in 2024, the central finance will allocate over 10 trillion yuan for transfer payments to local governments, allocating more funds to supplement local financial resources, supporting local areas to secure the fundamental "three guarantees" at the grassroots level.

Lian Fu'an: National education expenditure exceeded 3 trillion yuan from January to September.

Lian Fu'an stated to provide greater support for basic livelihood security. Since the beginning of this year, the central government has allocated 66.7 billion yuan for employment subsidies. National education expenditure exceeded 3 trillion yuan from January to September.

Lan Fuan: Overall alleviation of local government debt risks.

Lan Foan stated that the overall risk of local government debt has been eased, and the debt-based work has achieved phased results.

Lan Foan: The Ministry of Finance will issue special national bonds to support large state-owned commercial banks in replenishing capital.

Lan Fo'an stated that since the beginning of this year, the finance department has adhered to an active fiscal policy, moderately increasing efforts and improving quality and efficiency. China's finance has sufficient resilience, and by taking comprehensive measures, it can achieve a balance between revenue and expenditure, and meet the annual budget target. The finance department will issue special national bonds to support large state-owned commercial banks in supplementing capital.

Lan Foan: The central finance still has a relatively large space for borrowing and deficit enhancement.

Lan Foan stated that counter-cyclical adjustments not only include policies that have entered the decision-making process, but also other policy tools under study, such as the central finance still has a relatively large space for borrowing and deficit enhancement.

Lan Foan: Overlaying the use of tools such as local government bonds to support stabilizing the real estate market.

Lan Foan stated that on the basis of accelerating the implementation of established policies, the Ministry of Finance will sequentially introduce a targeted package of incremental policy measures around stabilizing growth, expanding domestic demand, and mitigating risks in the near term. This package of incremental policies includes supporting local government in resolving hidden debts, supporting large state-owned commercial banks in replenishing core Tier 1 capital, supporting stabilization of the real estate market, increasing support and protection for key groups, among many other aspects.

Blue Buddha An: significantly increasing the debt quota to support local resolution of hidden debts.

Blue Buddha An stated that the Ministry of Finance will significantly increase the debt quota to support local resolution of hidden debts so that localities can free up more energy and financial resources to promote development.

Blue Buddha An: Encouraging eligible regions to revitalize idle assets and strengthen the management of state-owned capital income.

Lanfoan stated that the Ministry of Finance will effectively supplement the comprehensive financial resources of local governments by 400 billion yuan. Encourage eligible regions to revitalize idle assets, strengthen the management of state-owned capital returns, make efforts to increase fiscal revenue, guide regions to use budget stabilization funds and other funds in accordance with the law and regulations to ensure the needs of fiscal expenditures.

Lan Fo'an: Avoiding excessive taxes to effectively protect the rights and interests of the operating entity.

Lanfoan stated that in their work, both raising fiscal revenue in accordance with the law and regulations and avoiding excessive taxes to effectively protect the rights and interests of business entities are important.

Lan Fo'an: Make good use of all kinds of debt funds.

Lan Foan stated that making full and proper use of various types of debt funds, currently the issuance of national bonds is accelerating, special ultra-long-term national bonds are being successively issued, in the next three months, a total of 2.3 trillion yuan of special bond funds can be arranged for use across the country.

Blue Buddha An: By the end of 2023, the hidden debts included in the national government debt information platform have decreased by 50% compared to the 2018 baseline.

Lan Foan stated that preventing and resolving local government debt risks is crucial for sustainable fiscal development. Since 2015, the Ministry of Finance, together with relevant departments, has taken a series of measures, issuing local bonds to replace outstanding government debts, promoting Beijing, Shanghai, and Guangdong to clear their outstanding implicit debts. In the second half of 2022, some regions began to show signs of debt risks. In July 2023, the Central Political Bureau meeting required the formulation of a comprehensive debt restructuring plan. The Ministry of Finance has allocated over 2.2 trillion yuan in local government bond quotas to support local governments in resolving outstanding debt risks and clearing overdue corporate accounts. By the end of 2023, the implicit debt included in the national government debt information platform has decreased by 50% compared to the 2018 baseline.

Lanfo'an: plans to increase the debt limit significantly at one time, replacing the hidden debts of local governments in stock.

Lan Foan stated that it is proposed to significantly increase the one-time debt limit and replace the outstanding implicit debts of local governments, intensifying efforts to support local government debt risk resolution. Relevant policies will be fully explained to the public after completing the statutory procedures. This policy is the most substantial measure to support debt restructuring introduced in recent years, serving as a timely help that will greatly alleviate the pressure on local governments, freeing up more resources to support economic development and strengthen the grassroots "Three Guarantees."

Deputy Minister of Finance Liao Min: Allow special bonds to be used for land reserve. Regions with actual need can use them for new land reserve projects.

Deputy Minister of Finance Liao Min stated at a press conference by the State Council Information Office that the Ministry of Finance and relevant departments are working together to focus on promoting the balance of supply and demand in the real estate market. Next, the Ministry of Finance will actively study and introduce incremental measures conducive to the stable development of real estate, allowing special bonds to be used for land reserve. This is mainly due to the relatively abundant unused and undeveloped land in various regions, where regions with actual need can use them for new land reserve projects.

Deputy Minister of Finance Liao Min: Allow special bonds to be used for land reserve. Regions with actual need can use them for new land reserve projects.

Liao Min stated that the Ministry of Finance and relevant departments are working together to focus on promoting the balance of supply and demand in the real estate market. Next, the Ministry of Finance will actively study and introduce incremental measures conducive to the stable development of real estate, allowing special bonds to be used for land reserve. This is mainly due to the relatively abundant unused and undeveloped land in various regions, where regions with actual need can use them for new land reserve projects.

Liao Min: Will use special bonds to acquire existing commodity houses.

Liao Min stated that next, the Ministry of Finance will actively study and introduce incremental measures favorable to the stable development of real estate, supporting the acquisition of existing houses. Increase the supply of guaranteed housing. Considering the relatively large number of unsold houses currently built. Two main support measures will be taken: one is to use special bonds to acquire existing commodity houses, for use as affordable housing in various regions. The other is to continue to make good use of the subsidies for the affordable housing project.

Liao Min: Currently intensively studying the VAT policy that clarifies and cancels the connection between the standards of ordinary residences and non-ordinary residences.

Liao Min stated that next, will actively study and introduce measures favorable to the stable development of real estate. There are three main considerations: firstly, allowing special bonds to be used for land reserves, mainly considering the large amount of idle undeveloped land currently, supporting local governments in using special bonds to recover qualified idle stock land, helping to reduce idle land and enhance the regulation capabilities of land supply.

Deputy Minister of Finance Wang Dongwei: Next step will be to study expanding the scope of special bonds to maintain the intensity and pace of government investment.

Vice Minister Wang Dongwei of the Ministry of Finance stated at the State Council Information Office press conference that since 2020, China has arranged a total of 18.7 trillion yuan in new special bonds. In 2024, the newly arranged special bond quota is 3.9 trillion yuan, the largest in history. As of the end of September, local governments have issued 3.6 trillion yuan in new special bonds, accounting for 92.5% of the annual quota. The next step will be to study expanding the scope of special bond use, maintaining the strength and pace of government investment, and reasonably reducing financing costs.

Wang Dongwei: The next key focus of special bonds is to study the expansion of the scope of special bond usage.

Wang Dongwei stated that the next focus of special bonds is to study expanding the scope of special bond use and improve the management mechanism. In terms of expansion, firstly, it will research and improve the list for the use of special bonds, increase their use in project capital areas, secondly, effectively utilize special bonds to support the acquisition of existing commodity houses for use as secured residential housing. Thirdly, support forward-looking and strategic emerging industries.

Wang Dongwei: The regulations for the supervision of ultra-long-term special national debt funds have been issued, establishing a common reserve fund system.

Wang Dongwei stated that the Ministry of Finance recently issued the Long-term Special National Bonds Fund Supervision Measures, proposing to establish a comprehensive lifecycle management system, implement special account management, establish a common reserve fund system, and take stricter, more practical, and more detailed measures to manage and utilize the Long-term Special National Bonds Fund well. Next, the plan is to fully complete this year's 1 trillion yuan long-term national bond issuance task and promptly allocate budget funds.

Editor/Somer