Core Viewpoint - The fiscal revenue and expenditure in the second half of the year will face pressure, but the probability of additional deficits is low. It is expected that fiscal policy reserves will be utilized to cover the revenue shortfall caused by the issuance of childcare and elderly service consumption subsidies [2][6][11]. Group 1: Fiscal Revenue and Expenditure Overview - In the first half of the year, the deviation of fiscal revenue and expenditure from the budget was limited, with national revenue falling short of the initial budget by 463 billion and expenditure lower by 1309 billion for the general public budget [4][6]. - The revenue and expenditure growth rates for the general public budget in the first half of 2025 were -0.3% and 3.4%, respectively, while the government fund revenue and expenditure growth rates were -2.4% and 30.0% [5][7]. Group 2: Projections for the Second Half of the Year - For the second half of the year, the expected growth rates for the general public budget revenue and expenditure are -4.5% and 1.5%, respectively, with a projected revenue shortfall of 516.6 billion and an expenditure shortfall of 547.2 billion compared to the budget [6][11]. - The second half of the year is anticipated to see government fund revenue and expenditure growth rates of -2.5% and 11.4%, respectively, with a budget shortfall exceeding 500 billion [6][11]. Group 3: Budget Management Strategies - In 2024, the highest deviation of the general public budget revenue from the budget reached 915.6 billion, but no additional deficit was added. Instead, measures such as strengthening tax collection and activating existing assets were employed to catch up with the budget [9][11]. - The central budget stabilization fund had a balance of 273.9 billion at the end of 2024, with 100 billion planned to be transferred in 2025, leaving a remaining balance of 173.9 billion [12].

Group 1 - The tax imposed is not directly on countries like the EU, Japan, or China, but rather on American consumers, which could negatively impact political support if framed as a direct tax increase on consumers [1] - The purpose of the tax is to address fiscal shortfalls and the expanding U.S. debt gap, while being presented as a means to support American manufacturing and strengthen the country [3] - The imposition of tariffs is expected to lead to increased consumer prices and inflation in the U.S., as consumers will face higher costs for goods [3] Group 2 - Japan has negotiated a 15% tariff rate, which is seen as a favorable outcome compared to the initially threatened 25%-27.5% rate, and this has led to a lack of significant pushback from Japan [3] - South Korea is also expected to negotiate down to a 15% tariff rate, similar to Japan [4] - The U.S.-China temporary tariff situation includes a base rate of 10% with additional rates for specific goods, leading to comprehensive rates that can reach up to 245% for electric vehicles [4][5] Group 3 - Certain technology products, such as semiconductors, are exempt from tariffs, indicating a strategic approach to protect key industries [5] - The overall tariff burden on China is higher than that on the EU and Japan, which may not adversely affect the latter's exports to the U.S. and could even provide them with competitive advantages [5][6] - There is speculation that China may devalue its currency to counteract the impact of U.S. tariffs, although an argument is made that the yuan should appreciate to increase costs for U.S. consumers and contribute to inflation [7]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The overall operation of general public budget revenue in the first half of 2025 was weak, with insufficient tax recovery momentum and limited support from non - tax revenue. The economic recovery foundation is still unstable, and the pressure on fiscal revenue growth remains significant. Meanwhile, the general public budget expenditure accelerated its expansion, focusing on people's livelihood and innovation, but the overall expenditure progress was slightly lower than the annual budget [3][4]. - The government - funded budget revenue in the first half of 2025 was under pressure, especially the land transfer revenue. In the context of the continuous adjustment of the real estate market, the growth of fund revenue lacks stable support. However, the government - funded budget expenditure accelerated, showing an active orientation of fiscal policies to stabilize growth and expand domestic demand [5]. 3. Summary by Related Catalogs General Public Budget Revenue - In the first half of 2025, the national general public budget revenue was 1.15566 trillion yuan, a year - on - year decrease of 0.3%. Tax revenue was 929.15 billion yuan, down 1.2% year - on - year, while non - tax revenue was 226.51 billion yuan, up 3.7% year - on - year. Central revenue was 485.89 billion yuan, down 2.8% year - on - year, and local revenue was 669.77 billion yuan, up 1.6% year - on - year [35]. - Main tax items: domestic VAT was 363.93 billion yuan, up 2.8% year - on - year; domestic consumption tax was 89.8 billion yuan, up 1.7% year - on - year; enterprise income tax was 249.1 billion yuan, down 1.9% year - on - year; personal income tax was 79.45 billion yuan, up 8% year - on - year; export tax rebates were 127.02 billion yuan, up 11.6% year - on - year; etc [36][37][38][39][40]. General Public Budget Expenditure - In the first half of 2025, the national general public budget expenditure was 1.41271 trillion yuan, a year - on - year increase of 3.4%. Central expenditure was 199.14 billion yuan, up 9% year - on - year, and local expenditure was 1.21357 trillion yuan, up 2.6% year - on - year [46]. - Main expenditure items: education expenditure was 214.83 billion yuan, up 5.9% year - on - year; science and technology expenditure was 47.9 billion yuan, up 9.1% year - on - year; social security and employment expenditure was 245.04 billion yuan, up 9.2% year - on - year; etc [47][48][50]. Government - Funded Budget Revenue - In the first half of 2025, the national government - funded budget revenue was 194.42 billion yuan, a year - on - year decrease of 2.4%. Central revenue was 21.73 billion yuan, up 4.8% year - on - year, and local revenue was 172.69 billion yuan, down 3.2% year - on - year. The state - owned land use right transfer income was 142.71 billion yuan, down 6.5% year - on - year [57]. Government - Funded Budget Expenditure - In the first half of 2025, the national government - funded budget expenditure was 462.73 billion yuan, a year - on - year increase of 30%. Central expenditure was 63.08 billion yuan, up 6.2 times year - on - year, and local expenditure was 399.65 billion yuan, up 15.1% year - on - year. The expenditure related to the state - owned land use right transfer income was 206.01 billion yuan, down 6.4% year - on - year [58][59].

Group 1 - The Ministry of Finance reported that in the first half of 2025, the national general public budget expenditure reached 141,271 billion yuan, a year-on-year increase of 3.4% [1] - Central government expenditure was 19,914 billion yuan, growing by 9% year-on-year, while local government expenditure was 121,357 billion yuan, increasing by 2.6% [1] - Key areas of expenditure included education (21,483 billion yuan, +5.9%), science and technology (4,790 billion yuan, +9.1%), social security and employment (24,504 billion yuan, +9.2%), health (11,004 billion yuan, +4.3%), and environmental protection (2,556 billion yuan, +5.9%) [1] Group 2 - National general public budget revenue was 115,566 billion yuan, a year-on-year decrease of 0.3% [1] - Central government revenue was 48,589 billion yuan, down 2.8%, while local government revenue was 66,977 billion yuan, up 1.6% [1] - The Ministry of Finance emphasized a stable overall fiscal operation, with tax revenue gradually recovering and most regions experiencing revenue growth [1] Group 3 - The Ministry of Finance's Social Security Department outlined five key areas of work in employment, pension, and healthcare [2] - Employment support included 667.4 billion yuan in employment subsidies from the central government [2] - The central government increased funding for basic pension insurance and ensured timely payments for over 300 million elderly citizens [2] - Medical security services were enhanced with 5,522 billion yuan allocated for related subsidies [2] - Support for vulnerable populations included 1,566.8 billion yuan in assistance for those in need [2]

Fiscal Revenue and Expenditure - In the first half of the year, the national general public budget revenue reached 11.56 trillion yuan, a year-on-year decrease of 0.3%, with the decline narrowing by 0.8 percentage points compared to the first quarter [1] - National general public budget expenditure was 14.13 trillion yuan, showing a year-on-year increase of 3.4% [1] - Overall, fiscal operations have remained stable, characterized by a gradual recovery in tax revenue, a decline in non-tax revenue growth, income growth in most regions, and increased fiscal spending in key areas [1] Employment and Social Security - The Ministry of Finance has allocated 667.4 billion yuan in employment support funds, emphasizing social security as a priority area for fiscal spending [2] - Policies include reducing unemployment and work injury insurance rates, increasing unemployment insurance subsidies, and expanding social insurance subsidies to stabilize jobs and support employment for college graduates [2] - The basic pension for retirees has been increased by 2%, and the minimum standard for urban and rural residents' basic pensions has been raised by 20 yuan [2] Healthcare and Public Health - The per capita fiscal subsidy standard for basic public health services has been increased by 5 yuan, reaching 99 yuan per person per year [3] - The per capita fiscal subsidy for urban and rural residents' medical insurance has been raised by 30 yuan, totaling 700 yuan per person per year [3] - A total of 552.2 billion yuan has been allocated for related subsidies this year to enhance medical assistance and reduce the financial burden on vulnerable groups [3] Consumer Spending Initiatives - The "old-for-new" consumption policy has been a key initiative to boost consumer spending, with 1.6 trillion yuan in sales for items like automobiles and home appliances [4] - Retail sales of household appliances and audio-visual equipment, cultural office supplies, communication equipment, and furniture have seen year-on-year growth rates of 30.7%, 25.4%, 24.1%, and 22.9% respectively [4] - The Ministry of Finance plans to accelerate the introduction of policies to stimulate consumer spending and improve the consumption environment [4][5]

Revenue Insights - In the first half of 2025, general fiscal revenue totaled 11.56 trillion, down 0.3% year-on-year, with June revenue at 1.89 trillion, also down 0.31% year-on-year[1][2] - Government fund revenue in June was 395.9 billion, a significant increase of 20.8% year-on-year, driven mainly by land transfer income[9][10] Expenditure Trends - Total general fiscal expenditure in the first half reached 14.13 trillion, up 3.4% year-on-year, with June expenditure at 2.83 trillion, a mere 0.38% increase year-on-year[1][2] - Central fiscal expenditure grew by 9% year-on-year, significantly outpacing local expenditure growth of 2.6%[2][8] Economic Outlook - The GDP growth rate for the first half of 2025 was 5.3%, suggesting a potential slowdown to around 4.7% in the second half, still maintaining a target of "around 5%"[4][5] - New policies are expected from the Political Bureau by the end of July, but strong stimulus measures are unlikely, with a focus on gradual support[4][5] Fiscal Policy Considerations - The fiscal policy approach is expected to be a "two-step" process, focusing first on the implementation of existing policies and then adjusting based on economic conditions[5][6] - Key areas of focus include the pace of government bond issuance and the actual progress of physical work projects[5][6]

Core Viewpoint - The overall performance of public finance in the first half of 2025 is stable, with a slight decline in revenue growth, indicating the need for continued improvement in tax and government fund income through PPI and land market enhancements [5][23]. Group 1: Public Finance Revenue - In the first half of 2025, public finance revenue showed a cumulative year-on-year decline of 0.3%, slightly lower than the previous year's growth of 1.3% [1][6]. - Tax revenue decreased by 1.2% year-on-year, an improvement compared to last year's decline of 3.4%, while non-tax revenue growth significantly slowed from 25.4% last year to 3.7% this year [1][8]. - The decline in non-tax revenue is attributed to a high base last year and a reduced reliance on non-tax income by the government [1][6]. Group 2: Monthly Performance - In June, tax revenue increased by 1.0% year-on-year, slightly higher than the previous value, while non-tax revenue fell by 3.7%, indicating an expanded decline [2][9]. - Domestic value-added tax and corporate income tax recorded year-on-year increases of 5.0% and 2.7%, respectively, contributing positively to June's fiscal revenue growth [2][11]. - The equipment manufacturing industry, modern services, and cultural sports entertainment sectors showed strong tax performance, reflecting the economic recovery in these areas [2][11]. Group 3: Fiscal Expenditure - Narrow fiscal expenditure in June saw a year-on-year decline of 0.4%, down from 2.6% previously, influenced by a decrease in non-tax revenue and a lull in infrastructure funding [3][12]. - Technology spending led the expenditure categories with an 18.1% year-on-year increase, while infrastructure-related expenditures showed weak performance, particularly in transportation and agriculture [3][14]. - The overall expenditure progress for the first half of the year was at 47.6%, indicating a slower pace compared to previous years, with expectations for acceleration in the second half [3][13]. Group 4: Government Fund Income - Government fund income in the first half of 2025 decreased by 2.4% year-on-year, primarily due to continued weakness in the land market, with land transfer income down 6.5% [4][19]. - In June, government fund budget revenue surged by 20.8%, marking a significant increase, although July data showed a notable decline, raising questions about the sustainability of this recovery [4][19]. - Government fund budget expenditure rose sharply by 79.2% year-on-year, largely driven by the issuance of special bonds, indicating a significant increase in overall fiscal spending [4][20].

Revenue Analysis - In the first half of 2025, the national general public budget revenue was 1,155.66 billion yuan, a year-on-year decrease of 0.3%[2] - Tax revenue amounted to 929.15 billion yuan, down 1.2% year-on-year, while non-tax revenue increased by 3.7% to 226.51 billion yuan[2] - In June, the general public budget revenue showed a monthly year-on-year decline of 0.3%, compared to a previous value of 0.1%[3] Expenditure Insights - Total general public budget expenditure reached 1,412.71 billion yuan in the first half, reflecting a year-on-year growth of 3.4%[2] - Central government expenditure was 199.14 billion yuan, up 9%, while local government expenditure grew by 2.6% to 1,213.57 billion yuan[2] - In June, general public expenditure increased by only 0.4% year-on-year, marking the slowest growth since 2019[3][14] Fund Budget Performance - Government fund budget revenue surged by 20.8% in June, primarily driven by a 21.9% increase in land transfer income[4] - Government fund expenditure in June skyrocketed by 79.2%, with land-related expenditures rising to 5.9%[4] - For the first half of the year, the second budget's revenue decreased by 2.4%, while expenditure grew by 30%[4] Overall Fiscal Trends - The broad fiscal expenditure growth rate was significantly up at 17.6% in June, compared to 4% previously[5] - Broad fiscal revenue showed a year-on-year increase of 2.8% in June, reversing a previous decline of 1.2%[5] - Year-to-date, broad fiscal revenue has decreased by 0.6%, with a completion rate of 47.8%[5]

Group 1 - In the first half of the year, the national general public budget revenue was 115,566 billion yuan, a year-on-year decrease of 0.3%, with tax revenue at 92,915 billion yuan, down 1.2%, and non-tax revenue at 22,651 billion yuan, up 3.7% [1] - The national general public budget expenditure reached 141,271 billion yuan, an increase of 3.4% year-on-year [1] - The Ministry of Finance addressed key social concerns such as local government debt risk, fiscal spending for people's livelihoods, and the issuance of government bonds during a press conference [1] Group 2 - By the end of June, 90% of the 20,000 billion yuan local government debt replacement bonds for 2025 had been issued, with 14,400 billion yuan already utilized [3] - The implementation of the replacement policy has significantly reduced debt interest payments and repayment pressures, while also releasing economic development momentum [3] Group 3 - The central government has allocated 66.74 billion yuan in employment support funds this year, focusing on employment priority strategies and reducing unemployment insurance rates [4] - Basic pension benefits for retirees have been increased by 2% nationwide, with the minimum standard for urban and rural residents' basic pensions raised by 20 yuan [4] Group 4 - The per capita financial subsidy standard for basic public health services has been increased by 5 yuan to 99 yuan per person per year, while the subsidy for urban and rural residents' medical insurance has been raised by 30 yuan to 700 yuan per person per year [5] - The central government has allocated 5,522 billion yuan in related subsidy funds for medical assistance this year [5] Group 5 - A record high of 78,800 billion yuan in government bonds was issued in the first half of the year, an increase of 20,547 billion yuan or 35.28% year-on-year, with an average issuance interest rate of 1.52% [6] - The average bid-to-cover ratio for book-entry government bonds was 3.03 times, indicating strong investor interest [6] Group 6 - The Ministry of Finance has allocated 690 billion yuan in the third batch of ultra-long-term special government bond funds to support the "old for new" consumption initiative, with total sales in this area reaching 1.6 trillion yuan in the first half of the year [7] - Retail sales of home appliances and other consumer goods saw significant year-on-year growth, contributing to a 5% increase in total retail sales of consumer goods [7]

Group 1: Fiscal Revenue - The overall fiscal operation is stable, with some industries showing good tax revenue performance [1] - National general public budget revenue for the first half of the year reached 115,566 billion yuan, a year-on-year decrease of 0.3%, with the decline narrowing by 0.8 percentage points compared to the first quarter [1] - Tax revenue is gradually recovering, with national tax revenue at 92,900 billion yuan, down 1.2% year-on-year, but showing growth for three consecutive months since April [1] Group 2: Fiscal Expenditure - National general public budget expenditure for the first half of the year was 141,271 billion yuan, an increase of 3.4% year-on-year [2] - Key areas of expenditure, such as education, science and technology, social security, and health, received significant funding, with education spending at 21,483 billion yuan (up 5.9%), science and technology at 4,790 billion yuan (up 9.1%), social security at 24,504 billion yuan (up 9.2%), and health at 11,004 billion yuan (up 4.3%) [2] - The government has prioritized social security in its fiscal spending, with central finance allocating 66.74 billion yuan for employment subsidies and 156.68 billion yuan for assistance to vulnerable groups [2] Group 3: Government Bond Issuance - Local government special bonds and other financial instruments saw significant spending, with 24,300 billion yuan allocated in the first half of the year, driving a 30% increase in government fund budget expenditure [3] - New local government special bonds issued in the first half of the year totaled 21,600 billion yuan, a year-on-year increase of 45% [3] - The Ministry of Finance is working to optimize the management of special bonds to enhance their effectiveness in supporting infrastructure and public welfare projects [3]