This meeting emphasized that the judgment of the economic situation has changed steadily, and for the first time, it was put forward that there are worries in the change. At the same time, many problems emphasized in the previous policies have been continuously promoted, reflecting the strengthening of policy continuity. There are short-term and long-term economic issues in this meeting, and it is expected that the follow-up policies will be more comprehensive.
Therefore, the monetary policy emphasizes the need to improve the transmission mechanism, and the fiscal policy proposes to confirm the implementation of larger-scale tax reduction and fee reduction, and greatly increase the scale of local government special bonds; Regarding the problem of private enterprises, this year it is proposed to solve the financing problem of private enterprises. It is expected that more substantive policies will gradually land in the future.
Supply-side structural reform is still the main line: "consolidation, enhancement, promotion and smoothness" was first put forward. It is expected that the relevant policies will continue to be implemented in the early stage, but more targeted; It is proposed to enhance the vitality of micro-subjects, including establishing fair, open and transparent market rules and a business environment ruled by law to ensure the growth of enterprises from the institutional level; Improve the level of industrial chain; Smooth the national economic cycle and form a virtuous circle of production, economy, employment, finance and entity.
The first battle of the three tough battles was successful, and the content was detailed: this year, we once again emphasized the persistence of structural deleveraging. For the financial sector, it is necessary to guard against abnormal fluctuations and shocks in financial markets, and there may be specific isolation measures for linkage risks between financial markets. At the same time, it also detailed the specific requirements for preventing local government debt risks, and proposed to be "firm, controllable, orderly and moderate".
Seven key tasks reveal stable expectations and then raise demand: It is found that most of the eight key tasks of economic work in 20 18 have been extended this year. Manufacturing upgrading, state-owned enterprise reform, regional coordinated development and all-round opening-up are all reflected in the seven tasks of 20 19, and the stable expectation is very obvious. While the policy continued, it was found that its direction was obviously refined and many specific requirements were put forward, which showed that the administrative logic of the government had changed from flooding to pertinence.
At the same time, the key work of 20 19 is to promote 20 19 to form a strong domestic market. At first glance, residents' consumption and investment have been mentioned again. The meeting emphasized that "the investment demand potential in China is still huge at this stage". From the expression, manufacturing investment will increase, and infrastructure performance is more likely than 20 18.
On the whole, the Central Economic Work Conference strengthened the countercyclical adjustment of macro-policies because the current downward pressure on the economy is relatively large. During this period, it is necessary to adopt a proactive fiscal policy and a moderately loose monetary policy, and focus on expanding domestic demand.
To stimulate consumption and investment, we need active finance and moderately loose money, including increasing fiscal expenditure, moderately expanding fiscal deficit, increasing the effect of transfer payment, and increasing government infrastructure expenditure with finance to stimulate economic growth. Future tax cuts and other aspects still depend on the adjustment of fiscal and taxation policies during the two sessions next year.
As far as fiscal policy is concerned, the positive intensity is expected to be even greater. At present, market investors expect that the scale of local government special bonds will be significantly expanded in 20 19, which is expected to be around 2 trillion (1.3 trillion in 20 18).
The proactive fiscal policy should be strengthened to improve efficiency (the "strengthened" fiscal policy means that the proportion of government deficit will be increased by%, tax reduction and fee reduction will be implemented on a larger scale, and the scale of special bonds of local governments will be greatly increased (special bonds are not included in the fiscal deficit, giving local governments more financing space, and the estimated supply may reach 2 trillion yuan).
What is worth looking forward to is that fiscal policy plays a leading role in counter-cyclical regulation. The keynote of the fiscal policy of this meeting is "increasing efforts to improve efficiency", which is "unchanged in orientation" compared with 20 17, and the fiscal policy is obviously overweight.
The expansion of fiscal expenditure depends on the upward adjustment of deficit ratio. The second is to increase the amount of local government special bonds. Previously, the market had expected, and this meeting clearly proposed a substantial increase in the amount of local government special bonds. According to the increasing scale in recent years, the new scale in 20 19 may be 2.5-3 trillion, which is 1. 15 trillion to 1.65 trillion higher than that in 20 18.
As for local government debt, the report mentioned three things: first, "substantially increase the scale of local government special bonds"; The second is to "handle local government debt risks in a safe, controllable, orderly and moderate manner"; Third, "improve the local tax system and standardize the government debt financing mechanism." On the whole, the local government debt constraint will not be relaxed obviously, but it will increase the intensity of opening the gate.
The latest news is that "special additional deduction" will be implemented from 20 19 1, with the maximum deduction of150,000!
If large-scale tax reduction and fee reduction can be achieved, China's economy is expected to shift from investment-driven to consumption-driven and innovation-driven in the future.
In 20 19, China's fiscal expenditure is expected to reach 22 trillion yuan. If we can reduce economic construction or administrative expenditure by 5%, we can release more than one trillion yuan for tax reduction.
At present, the main pressure that restricts the consumption growth of Chinese residents comes from the surge in debt. In the past three years, residents' debt has increased by 20 trillion yuan. According to the loan interest of about 5%, it is equivalent to residents paying 1 trillion yuan of loan interest every year. However, in the past two years, our tax reform has reduced the burden on residents by about 300 billion. If the value-added tax reduction can reach 1 0.5 trillion, assuming that half of it belongs to residents, it is equivalent to our accumulated tax reduction for the residential sector1trillion, which is equivalent to offsetting the interest on loans to buy houses in the past few years, and the residential sector can go into battle lightly and regain consumer confidence.
Secondly, tax cuts will increase corporate profits and increase the motivation for innovation. In 1970s, the United States had an oversupply of money, stagnant innovation and a continuous decline in R&D /GDP. However, after Reagan's massive tax cuts in the 1980s, the proportion of R&D and intellectual property investment increased, and it entered an era of innovation. In 2008, China reduced the corporate income tax rate from 33% to 25%. In 2009, China's R&D /GDP increased by 0.22 percentage points, while the average increase in the past 20 years was only 0.07 percentage points, indicating that tax reduction has obvious incentive effect on innovation.
If we can still restrain the impulse of excessive money, instead of stimulating real estate, we will vigorously reduce taxes and fees for enterprises that have settled in, then in the future, we are also expected to move towards a consumption and innovation-driven economic growth model.
In contrast, China's government debt ratio is still not high, and there is still room for growth in the short term. At present, the total balance of national debt and local debt in China is 32.7 trillion yuan. According to the estimated GDP of about 90 trillion in 18, the government debt ratio is 36%, but this is only an open government explicit debt. In fact, there is a huge hidden government debt in China, which is mainly generated by local governments through irregular operation or disguised borrowing. We estimate that the scale of hidden government debt is about 30 trillion, but this part of debt can not be counted as government debt strictly. Assuming that the government and the market bear half the responsibility, the total debt level of our government is about 48 trillion yuan, which is about 53% of GDP. According to the data of the Bank for International Settlements, the debt ratio of China government in 17 is about 47%, which is roughly the same as our calculation.
Therefore, according to the government debt ratio of about 50% in China, it is still far lower than 97% in the United States, 100% in Japan and 87% in the euro zone. Trump can still introduce a trillion-dollar tax reduction policy when the government debt ratio is as high as 97%, and our government debt ratio is much lower than that of the United States, which means that we can also borrow money to reduce taxes.
The deficit is not hard, and the tax reduction can exceed one trillion.
Another constraint of government borrowing is fiscal deficit ratio. Usually, all countries regard 3% stipulated in Maastricht Treaty as the red line of fiscal deficit ratio.
But in fact, in developed countries, the 3% fiscal deficit ratio red line is often broken. For example, the fiscal deficit ratio of the United States in 2009 was as high as 9.8%, the fiscal deficit ratio of Japan in 2009 exceeded 10%, and the fiscal deficit ratio of the euro zone in 2009 was also 6%.
As a developing country, China once regarded 3% as the red line of fiscal deficit ratio. 18, the budget deficit of China was 2.38 trillion yuan, and the budget of deficit ratio was 2.6%. Assuming that the budget of deficit ratio will increase to 3% in 19, GDP will increase to 97 trillion, and the budget deficit in 19 can increase to 29 10 billion, which is 530 billion more than that in 18, and there is limited room for growth.
But China's budget deficit is not the same as the actual deficit. For example, in 20 17, the budget deficit was 2.38 trillion yuan, and the budget of deficit ratio was 3%, but the actual fiscal deficit in that year was 3.076 billion yuan, and that of deficit ratio was 3.7%. The difference is that China has a budget stabilization fund, which can be used to make up the gap between the budget deficit and the actual deficit. In addition, China's local government special bonds are included in the government fund income, but not included in the fiscal deficit. If we consider issuing 800 billion local government special bonds that year, the actual fiscal deficit will be even greater.
On the whole, in order to significantly increase the actual fiscal deficit in China in 19, in addition to increasing the nominal fiscal deficit ratio from 2.6% to 3% and the nominal deficit of 530 billion, we can also use the fiscal budget leveling fund or increase the issuance of special local government bonds.
The Ministry of Finance announced that the balance of the central budget stabilization fund at the end of 17 was 466.6 billion, and the balance of funds carried forward by local governments at the end of 16 was 924.6 billion. Assuming little change in the past two years, the total amount of funds available in this part is 1.4 trillion. /kloc-in 0/8, the issuance scale of local government special bonds was 1.35 trillion. According to the statement that the scale of local government special bonds has increased substantially, it is estimated that the issuance scale of local government special bonds may exceed 2 trillion in 19.
Therefore, after adding nominal deficit, budget stabilization fund and local government special debt, the total actual deficit in 19 can increase by about 4 trillion compared with 18, reaching 6 trillion. Among them, 3 trillion comes from the nominal fiscal deficit, 2 trillion comes from local government special bonds, and the rest 1 trillion comes from the budget stabilization fund.
Generally speaking, if the nominal deficit ratio is slightly increased, the local government's special debt is greatly increased, and the budget stabilization fund is appropriately used, the actual fiscal deficit can actually be greatly increased without touching the 3% red line of the nominal deficit ratio. And this new 4 trillion real fiscal deficit is actually a potential tax reduction space. However, considering that most local special debts correspond to local special projects, we believe that the new fiscal deficit can support 1 trillion -2 trillion tax reduction, and the rest may be used to support infrastructure investment.