Fiscal policies to back biz, consumption, digital economy, growth

Continued support for market players, in the form of local governments' optimized tax and fee cuts, mitigation of businesses' financial burdens and focus on the digital economy, shows that fiscal policy will continue to firmly support the healthy development of the market and rev up growth engines this year, experts said.

A number of provincial-level governments have recently released reports of fiscal budgets for this year, and reassured that both the intensity and effectiveness of fiscal policy will be enhanced.

Some local governments said in the reports that they will keep the required intensity in fiscal spending. And expenditure will relieve some of the financial burdens on businesses, thus boosting consumption and stabilizing investment. The digital economy will receive priority in the development agenda.

More efforts will be made to improve policy implementation to stabilize economic growth this year, they said.

Zhejiang province's budget report highlighted that it will ensure the required fiscal spending for key projects and will prioritize consumption in fiscal policy, while Hunan province said in its report that particular fiscal support will be given to expanding domestic demand and boosting consumption, particularly of upgraded housing, new energy vehicles and elder care services.

Continued tax and fee cuts are also among the highlights of many provinces' reports this year, as local governments are ramping up efforts to mitigate financial burdens of businesses and invigorate market players.

Henan province said in its report that the local government will work harder to help businesses tide over difficulties, optimize the fee and tax cut policy implementation structure, and work constantly to lower operational costs of businesses.

Shanghai underlined in its report the importance of consolidating and expanding the outcomes of last year's tax and fee cuts. The metropolis will make such policy incentives more targeted at those in need.

Shi Yinghua, a professor at the Chinese Academy of Fiscal Sciences, said: "Late last year, the central authorities have repeatedly reiterated the need to keep the necessary intensity in fiscal spending this year. In particular, the new round of continued tax and fee cuts, and optimization of the tax cuts structure from the local government level, reflect the stability and continuation of policy support to boost economic growth this year."

"This also partly reflects that more efforts will be made to improve fiscal structures to increase fiscal policy intensity and boost economic recovery this year," Shi said, adding that fiscal policy will continue to play an important role in expanding investment and encouraging consumption, and that boosting growth will be the key priority of fiscal policy this year.

Wu Qi, executive dean of the Wuxi Institute of Digital Economy, hailed the focus of many local-level governments as they prioritized fiscal spending on the digital economy this year.

Wu said that industrial digitalization is important for growing the digital economy, yet the process usually means a considerable liquidity burden for small and medium-sized enterprises. Fiscal fund support in this process will not only help relieve their burden, but also contribute to the industrial upgrade this year and beyond.