Group 1: Fiscal Revenue and Taxation - In January-February 2025, national general public budget revenue was CNY 4.4 trillion, a year-on-year decrease of 1.6%[6] - Tax revenue decreased by 3.9%, while non-tax revenue increased by 11%[7] - Personal income tax grew by 26.7%, contributing 2 percentage points to fiscal revenue, primarily due to a low base in 2024[7] - Corporate income tax fell by 10.4%, dragging down fiscal revenue by 2.4 percentage points, indicating ongoing challenges in corporate profitability recovery[7] Group 2: Fiscal Expenditure and Investment - National general public budget expenditure reached CNY 4.5 trillion, a year-on-year increase of 3.4%[6] - Social security, education, and health spending accounted for approximately 43.1% of total expenditure, up 0.8 percentage points from the previous year[7] - Infrastructure-related spending decreased by 5.6% year-on-year, contributing to a 1.2 percentage point drag on overall fiscal expenditure[7] Group 3: Land Sales and Government Funds - Government fund revenue was CNY 0.6 trillion, down 10.7% year-on-year, with land transfer revenue declining by 15.7%[7] - The pace of government fund expenditure was slower than in previous years, with a cumulative completion rate of 10.2%[7] Group 4: Fiscal Challenges and Future Outlook - The broad fiscal revenue and expenditure growth rates were -2.9% and 2.9%, respectively, falling short of the annual budget targets of 0.2% and 9.3%[7] - The government plans to issue CNY 5.66 trillion in deficits for 2025, with a broad deficit rate projected at approximately 8.4%[7] - Future fiscal policies may need to be adjusted to address ongoing revenue pressures and support economic stability[7]

Core Viewpoint - The article discusses the 2025 fiscal budget proposal, highlighting a shift towards a more proactive fiscal policy with an emphasis on flexibility in deficit targets and a focus on key areas such as technology, security, and public welfare [1][2][3]. Group 1: Fiscal Policy Adjustments - The 2025 fiscal budget sets a deficit rate of "around 4%", allowing for potential adjustments mid-year, which is a departure from the rigid numerical targets used in previous years [1]. - The budget reflects a more pragmatic approach to nominal GDP growth estimates, revising the implicit nominal GDP growth rate down from 7.4% in 2024 to 4.9% in 2025 [4]. Group 2: Spending Focus - The fiscal spending for 2025 will increasingly target technology, security, and public welfare, with notable increases in allocations for education, diplomacy, national defense, and scientific research [2]. - In contrast, spending related to infrastructure, rural community development, and transportation is expected to decrease in importance [2]. Group 3: Revenue Adjustments - The budget anticipates a significant reduction in non-tax revenue, with a projected year-on-year decline of 14.2%, reflecting a strategy to lessen reliance on unsustainable revenue sources [3]. - Tax revenue expectations remain high, with positive growth targets set for most tax categories, excluding specific taxes like the tonnage tax on ships and vehicle purchase tax [3]. Group 4: Debt Issuance - The central government's bond issuance is projected to rise, with central government bonds accounting for 56.2% of total government bond issuance, marking a shift where central debt issuance surpasses local [5]. - This indicates a greater responsibility for counter-cyclical fiscal adjustments being placed on the central government [5]. Group 5: Challenges in Fund Revenue - The budget acknowledges potential difficulties in meeting government fund revenue targets due to the ongoing challenges in the real estate market and declining land use rights revenue [6].