Core Viewpoint - The article emphasizes the significance of the recent fiscal policy changes, particularly the allocation of 500 billion yuan from the local government debt balance limit, which is expected to directly support project construction in major economic provinces and facilitate credit expansion [5][11][38]. Group 1: Fiscal Data Overview - In September, the broad fiscal revenue increased by 3.2% year-on-year, compared to 0.3% in August, while broad fiscal expenditure rose by 2.3% year-on-year, down from 6% in August [2]. - The tax revenue growth reached a new high for the year at 8.7%, indicating strong fiscal performance [5][22]. Group 2: Understanding the Debt Balance Limit - The local government debt balance limit refers to the difference between the legally permitted debt limit and the actual debt balance, which allows for additional borrowing capacity [7][25]. - By the end of 2023, the local debt limit was 42.17 trillion yuan, with a balance of 40.74 trillion yuan, resulting in a balance limit of 1.43 trillion yuan [10][27]. Group 3: Purpose of the 500 Billion Yuan Allocation - The allocation of the 500 billion yuan is aimed at supporting major economic provinces to achieve their development goals and stabilize the economic recovery [11][29]. - This year's allocation is not primarily focused on meeting fiscal budget targets, as tax revenue has shown resilience, leading to a potential budget surplus [11][28]. Group 4: Implications of the Allocation - The 500 billion yuan allocation, combined with another 500 billion yuan from new policy financial tools, effectively provides a trillion yuan in additional fiscal resources for local governments [6][41]. - This funding can now be used for project construction in major economic provinces, marking a shift from previous years where it was limited to debt repayment and clearing arrears [16][38]. Group 5: Observations on Fiscal Performance - The article notes that tax revenue growth has been driven by price-related taxes and personal income tax, with significant contributions from the computer and communication equipment sectors [45][47]. - The government fund income growth turned positive in September, primarily due to a narrowing decline in land sales revenue [67].

Group 1: Fiscal Data Overview - In September, general fiscal revenue increased by 3.2% year-on-year, compared to 0.3% in August[1] - General fiscal expenditure in September rose by 2.3% year-on-year, down from 6% in August[1] - Tax revenue growth reached a year-to-date high of 8.7% in September, indicating strong fiscal performance[2] Group 2: Debt Limit and Policy Changes - The central government allocated 500 billion yuan from local government debt limits to support local projects, exceeding last year's allocation of 400 billion yuan[2] - The total debt limit for local governments was 42.17 trillion yuan at the end of 2023, with a balance of 40.74 trillion yuan, resulting in a remaining limit of 1.43 trillion yuan[5] - By the end of 2024, the debt limit is expected to increase to 52.8 trillion yuan, allowing for a remaining limit of 5.3 trillion yuan after accounting for debt replacement policies[5] Group 3: Economic Support and Investment - The 500 billion yuan allocation aims to bolster economic recovery and support local governments in achieving their development goals[6] - The policy shift allows for the use of debt limits not only for debt repayment but also for project construction, directly aiding credit expansion[9] - The combination of the 500 billion yuan debt limit and an additional 500 billion yuan in quasi-fiscal funds provides a total of 1 trillion yuan in fiscal support for local projects[10] Group 4: September Fiscal Insights - Tax revenue growth was primarily driven by domestic value-added tax and corporate income tax, contributing significantly to overall revenue[41] - Government fund income showed a positive growth of 5.6% in September, with a notable reduction in the decline of land sale revenue to -1%[64] - The overall fiscal expenditure growth rate was 3.1% in September, with infrastructure spending showing signs of recovery[58]

Core Viewpoint - The article discusses the phenomenon of tax revenue increasing despite a slowdown in economic growth during July and August, attributing this to several non-economic factors affecting tax collection and government revenue [4][12]. Group 1: Tax Revenue Trends - In August, the broad fiscal revenue increased by 0.3% year-on-year, compared to a 3.6% increase in July. Fiscal expenditure in August rose by 6%, down from 12.1% in July [2]. - Tax revenue growth exceeded 5% in both July and August, driven primarily by domestic value-added tax and corporate income tax, which contributed 3.9 and 4.4 percentage points respectively to tax revenue growth [4][15]. Group 2: Non-Economic Factors Influencing Tax Revenue - Three non-economic factors are identified as influencing tax revenue: 1. "Passive tax pressure" from prices leading to corporate recovery from internal competition [20]. 2. "Active tax pressure" from local protectionism resulting in lower effective tax rates, with government efforts to standardize tax practices [27]. 3. Increased activity in the capital markets, which has significantly boosted tax revenues from related sectors, with securities industry tax revenue growing over 70% in July and August [31]. Group 3: Fiscal Data Analysis - Public fiscal revenue showed a slight year-on-year decline of 2% in August, with tax revenue continuing to grow for five consecutive months, although foreign trade and real estate-related taxes have increasingly dragged down overall revenue [32][34]. - Infrastructure spending has been under pressure, with a decline of 6.1% in the first eight months of the year, necessitating supplementary financing through quasi-fiscal measures [44][53]. Group 4: Policy Implications - The likelihood of budget adjustments and debt issuance is decreasing, as resilient tax revenue suggests that the actual income gap relative to budget targets may not be significant [5][16]. - The article suggests that quasi-fiscal measures could be a flexible response to current economic conditions, with ample room for such measures to be implemented quickly without waiting for formal budget adjustments [17][18].

1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - Policy - based financial tools are carriers of policy - based finance, aiming to provide capital for national strategic projects, with a strong "quasi - fiscal" attribute. Historical practices include the special construction funds from 2015 - 2017 and the policy - based and development financial tools in 2022. The upcoming new policy - based financial tools may continue the feature of monetary - fiscal coordination [14][18][108]. - If the new policy - based financial tools are established in the third quarter of 2025 and fully invested within the year, they are expected to boost RMB credit growth by 0.33 - 1.00 percentage points and infrastructure investment growth by 5.67 - 12.38 percentage points in 2025 [4][101]. 3. Summary by Relevant Catalogs 3.1 What are Policy - based Financial Tools? - "Policy - based finance" emphasizes government macro - control. Policy - based financial tools are carriers of policy - based finance, providing capital for national strategic projects and having a "quasi - fiscal" attribute. The concept of new policy - based financial tools was first proposed in 2025, which may inject new vitality into infrastructure investment and help stabilize economic growth in the second half of the year [13][14]. 3.2 Looking Back at the Historical Practice and Evolution of Policy - based Financial Tools 3.2.1 Special Construction Funds with "Second Fiscal" Characteristics - **Establishment Background**: In 2015, to expand effective investment and relieve economic downward pressure, the NDRC proposed to issue special bonds to raise funds for special construction funds. Externally, the Fed tightened liquidity, and internally, the economy was in the "three - phase superposition" new normal, with domestic investment in real estate, infrastructure, and manufacturing declining [19]. - **Funding Sources**: Initially, policy banks issued special bonds to the Postal Savings Bank, with 90% central fiscal discount. Later, it was changed to public issuance in the market, and the discount was adjusted to different levels [22]. - **Investment Areas**: It mainly supported key construction projects, covering five major categories and 33 special projects such as people's livelihood improvement, "three rural" construction, and infrastructure. It also began to expand to transformation and upgrading fields [26]. - **Operation Mode**: Policy banks established special construction fund companies. Local governments and state - owned enterprises submitted project applications to the NDRC, which formed a project list. The funds were invested in an equity form, with a fixed return and an exit mechanism such as equity transfer or repurchase [30][32][33]. - **Investment Effect**: Theoretically, it could leverage 4 - 6.67 times the investment scale, and in practice, it could leverage 3.45 - 4.29 times. It played a role in stabilizing infrastructure investment, and the growth rate of fixed - asset investment in industries such as water conservancy increased significantly [40][41]. 3.2.2 Policy - based and Development Financial Tools Highlighting "Monetary - Fiscal Coordination" - **Establishment Background**: In 2022, due to the impact of the pandemic, the economy faced triple pressures. The government introduced a series of policies, including setting up policy - based and development financial tools to support economic growth. A total of about 7399 billion yuan was invested [44][48]. - **Funding Sources**: The first batch was mainly from market - based bond issuance, and the subsequent batches might have PSL funds as a supplement, reflecting the synergy between currency and finance [51]. - **Investment Areas**: The scope was further expanded to include some new infrastructure and green energy projects. However, in practice, traditional infrastructure fields were still the main focus [53][54]. - **Operation Mode**: Similar to special construction funds, policy banks established infrastructure fund investment companies. The central government provided appropriate interest subsidies for 2 years. The investment period was 15 - 20 years [59][60]. - **Investment Effect**: It significantly promoted infrastructure investment, boosting the growth of large - scale project investment and total fixed - asset investment. It also repaired the loan demand in the infrastructure industry [68][69]. 3.2.3 Comparison of the Two Types of Policy - based Financial Tools - Although there are differences in details such as funding sources, subsidy policies, and investment ratios, their core function is to provide project capital for major projects, essentially "capital loans" [71]. 3.3 Understanding the New Policy - based Financial Tools - The core function may still be to supplement project capital, but the investment areas may include new infrastructure such as digital economy and artificial intelligence, and the support may be tilted towards private enterprises [78][79]. - The funding sources may be market - based bond issuance by policy banks, supplemented by PSL funds and central fiscal subsidies. The total scale is about 50 billion yuan [80][81]. - The operation process is similar to the previous two rounds. It may participate in the form of equity investment, shareholder loans, and special bond capital bridging loans, with shareholder loans being the main form [85]. - The establishment speed is relatively slow, possibly to reserve policy space and allow sufficient time for project application. It is expected to be established and put into use in September - October 2025 to stabilize infrastructure growth [90][98]. 3.4 Calculation of the Stimulative Effect of New Policy - based Financial Tools on Stable Growth - **Credit Demand Stimulative Effect**: Referring to the 2022 experience, policy - based financial tools can leverage 1.55 - 4.73 times of credit demand. If 50 billion yuan of new policy - based financial tools are invested within the year, they can boost credit growth by 0.33 - 1.00 percentage points [102][104]. - **Infrastructure Investment Stimulative Effect**: They can leverage 10 - 13.2 times of total infrastructure investment. About 50 billion yuan of new policy - based financial tools can boost infrastructure investment growth by 5.67 - 12.38 percentage points in 2025 [105][106]. 3.5 Summary - Policy - based financial tools play a crucial role in providing capital for major projects. The upcoming new tools may continue the feature of monetary - fiscal coordination, with innovations in investment areas and participating subjects. Attention should be paid to the possibility of the central bank adjusting PSL interest rates [108].

Core Insights - The new policy financial tools are aimed at stabilizing investment and promoting innovation, with a total funding scale of 500 billion yuan, focusing on emerging industries and infrastructure [1][6][8] - Local governments are actively preparing and identifying projects for funding, with a focus on high-tech and socially beneficial projects [3][4][5] Group 1: Policy and Funding Mechanism - The new policy financial tools are classified as "quasi-fiscal" instruments, with project lists screened by development and reform departments, and funding provided by policy banks [2][8] - The tools are designed to address capital shortages for project construction, lower financing thresholds, and expand effective investment [6][8] Group 2: Project Identification and Preparation - Various regions, including Hubei and Guangdong, are conducting project preparation meetings to align with national strategies and identify high-quality projects [3][5] - Specific projects have been identified, such as 11 projects in Shanxi with a total investment of 13.369 billion yuan, requiring 2.186 billion yuan from the new financial tools [4][6] Group 3: Economic Context and Challenges - The introduction of these tools comes in response to declining investment growth, with fixed asset investment growth slowing to 1.6% in July [8][9] - There are concerns regarding the effectiveness of policy banks in investing in emerging industries, which require specialized judgment [9]

Group 1 - The A500 Index (000510) increased by 0.07% as of June 23, 2025, with notable gains from stocks such as Aerospace Development (000547) up 9.94% and Guoxuan High-Tech (002074) up 6.15% [1] - The A500 ETF Fund (512050) rose by 0.11%, with a latest price of 0.93 yuan and a turnover rate of 7.31%, resulting in a transaction volume of 1.131 billion yuan [1] - The A500 ETF Fund's average daily transaction volume over the past year reached 3.573 billion yuan, ranking first among comparable funds, with a total fund size of 15.49 billion yuan [1] Group 2 - The Ministry of Finance reported that from January to May, the national general public budget revenue was 96,623 billion yuan, a year-on-year decrease of 0.3%, while expenditure was 112,953 billion yuan, an increase of 4.2% [1] - According to Kaiyuan Securities, the fiscal revenue and expenditure rhythm slowed down in May, with a focus on technology, consumption, and livelihood, indicating potential for further fiscal stimulus [2] - The A500 Index is designed to reflect the overall performance of the most representative listed companies across various industries, selecting 500 securities with larger market capitalization and better liquidity [2] Group 3 - As of May 30, 2025, the top ten weighted stocks in the A500 Index accounted for 21.21% of the index, including Kweichow Moutai (600519) and Contemporary Amperex Technology (300750) [2] - The top ten stocks by weight showed slight declines, with Kweichow Moutai down 0.22% and Contemporary Amperex Technology down 0.33% [4]

Revenue Insights - In May, the national general public budget revenue was CNY 16,007 billion, showing a year-on-year growth of only 0.13%, a decline of 1.76 percentage points from the previous value[3] - Cumulative public budget revenue from January to May decreased by 0.3% year-on-year, maintaining a similar decline as the previous value[3] - Tax revenue growth faced obstacles, with a year-on-year increase of only 0.6% in May, down from 1.9% previously, leading to a cumulative decline of 1.6% year-on-year[3] Expenditure Trends - Public budget expenditure in May reached CNY 19,372 billion, growing by 2.6% year-on-year, a slowdown from the previous 5.8%[4] - Cumulative expenditure growth from January to May was 4.2%, still above the annual target growth rate[4] - Science and technology expenditure surged by 20% year-on-year, while infrastructure spending showed a decline, with agricultural and community affairs down by 11.5% and 8.4% respectively[4] Fund Revenue and Expenditure - Government fund revenue in May was CNY 2,897 billion, a decrease of 8.2% year-on-year, marking a significant drop of 16 percentage points from the previous value[5] - Government fund expenditure grew by 8.8% year-on-year in May, although this was a decrease from the previous month's growth of 45%[5] - By the end of May, government fund expenditure progress was approximately 25.7% of the annual target, still higher than the same period in 2024[5] Economic Outlook - The marginal slowdown in fiscal revenue and expenditure suggests a focus on technology, consumption, and livelihood support, with expectations for continued stable issuance of government bonds in the third quarter[6] - Potential economic pressures due to tariff disturbances may lead to further fiscal stimulus, likely through new policy financial tools[6]

Core Viewpoint - The article discusses the fiscal revenue and expenditure situation in China for the first four months of 2025, highlighting a decline in general public budget revenue and an increase in expenditure, indicating a potential for fiscal acceleration supported by government debt financing [2][7]. Group 1: Fiscal Performance Overview - In the first four months of 2025, general public budget revenue was 80,616 billion yuan, a year-on-year decrease of 0.4%, while expenditure was 93,581 billion yuan, a year-on-year increase of 4.6% [2][7]. - The broad fiscal revenue grew by 2.7% year-on-year in April 2025, with expenditure increasing by 12.9%, showing improvements compared to March [3][8]. - The budget completion rates for broad fiscal revenue and expenditure were 33% and 28.4%, respectively, both higher than the average of the past five years [3][8]. Group 2: Government Debt and Financing - The broad fiscal deficit reached -2.7 trillion yuan in April 2025, exceeding the average deficit of -1.4 trillion yuan from 2020 to 2024, indicating strong support from government debt financing [10]. - As of May 16, 2025, the net financing of government bonds reached 2.4 trillion yuan, with an issuance progress of 49.4%, significantly higher than the 20.9% in the same period of 2024 [10]. Group 3: Special Bonds and Land Revenue - The issuance progress of new special bonds remains slow, with a current issuance scale of 1.37 trillion yuan and a progress rate of 31%, lower than the previous two years [13]. - Land transfer revenue showed a year-on-year increase of 4% in April 2025, with a significant improvement in growth rate compared to March [12][19]. Group 4: Policy Implications - The article emphasizes the initiation of "incremental policies," with financial policies leading the way, and highlights the importance of monitoring the pace and direction of future fiscal expenditures [4][15]. - The current 90-day tariff "grace period" is seen as a window for accelerating the implementation of established policies and strengthening the reserve of incremental policies [15].

Core Viewpoint - The article discusses the fiscal revenue and expenditure situation in China for the first four months of 2025, highlighting a decline in general public budget revenue and an increase in expenditure, indicating a potential for fiscal acceleration supported by government debt financing [2][7]. Group 1: Fiscal Performance Overview - In the first four months of 2025, general public budget revenue was 80,616 billion yuan, a year-on-year decrease of 0.4%, while expenditure was 93,581 billion yuan, a year-on-year increase of 4.6% [2][7]. - The broad fiscal revenue grew by 2.7% year-on-year in April 2025, and broad fiscal expenditure increased by 12.9%, with both metrics showing improvement compared to March [3][8]. Group 2: Debt Financing and Support - The broad fiscal deficit reached -2.7 trillion yuan in April 2025, higher than the average deficit of -1.4 trillion yuan from 2020 to 2024, indicating effective support from government debt financing [10]. - As of May 16, 2025, the net financing of government bonds reached 2.4 trillion yuan, with an issuance progress of 49.4%, significantly higher than the 20.9% progress in the same period of 2024 [10]. Group 3: Special Bonds and Land Revenue - The issuance progress of new special bonds remains slow, with a current issuance scale of 1.37 trillion yuan and a progress rate of 31%, lower than the 43.5% and 43.1% in 2022 and 2023 respectively [13]. - Land transfer revenue showed a year-on-year increase of 4% in April 2025, with a significant improvement in the growth rate compared to March, indicating potential recovery in local government financing [12][19]. Group 4: Government Fund Revenue and Expenditure - Government fund revenue increased by 8.1% year-on-year in April 2025, with land transfer income contributing to this improvement [19]. - Government fund expenditure surged by 44.7% year-on-year in April 2025, driven by the recovery in land transfer income and accelerated issuance of special bonds [31]. Group 5: Tax Revenue Trends - General fiscal revenue showed a year-on-year increase of 1.9% in April 2025, with tax revenue recovering marginally, particularly in stamp duty and individual income tax [25]. - The budget completion rate for general fiscal revenue in April 2025 was 9.3%, slightly higher than the same period in 2024 and the average of the past five years [25].

Core Viewpoint - The article discusses the fiscal revenue and expenditure situation in China for the first four months of 2025, highlighting a decline in general public budget revenue and an increase in expenditure, indicating a potential for fiscal acceleration supported by government debt financing [2][7]. Group 1: Fiscal Performance Overview - In the first four months of 2025, general public budget revenue was 80,616 billion yuan, a year-on-year decrease of 0.4%, while expenditure was 93,581 billion yuan, a year-on-year increase of 4.6% [2][7]. - The broad fiscal revenue grew by 2.7% year-on-year in April 2025, with expenditure increasing by 12.9%, reflecting a significant improvement compared to March [3][8]. - The budget completion rates for broad fiscal revenue and expenditure were 33% and 28.4%, respectively, both higher than the average of the past five years [3][8]. Group 2: Debt Financing and Special Bonds - The increase in broad fiscal expenditure is likely supported by government debt financing, with a fiscal deficit of 2.7 trillion yuan in April 2025, exceeding the average deficit of 1.4 trillion yuan from 2020 to 2024 [10]. - As of May 16, 2025, the net financing of government bonds reached 2.4 trillion yuan, with an issuance progress of 49.4%, significantly higher than the 20.9% in the same period of 2024 [10]. - The issuance progress of new special bonds remains slow at 31% as of May 16, 2025, indicating potential for acceleration if revenue recovery slows [13]. Group 3: Revenue and Expenditure Trends - Government fund revenue improved significantly, with a year-on-year increase of 8.1% in April 2025, driven by a 4% increase in land transfer income [19]. - Tax revenue showed signs of recovery, with general fiscal revenue increasing by 1.9% year-on-year in April 2025, supported by a notable rise in personal income tax [25]. - Broad fiscal expenditure rose by 12.9% year-on-year in April 2025, with government fund expenditure increasing by 44.7%, reflecting a strong acceleration in spending [26][31]. Group 4: Policy Implications - The article emphasizes the initiation of "incremental policies," with financial policies leading the way, and highlights the importance of monitoring the pace and direction of future fiscal expenditures [4][15]. - The current 90-day tariff "grace period" is seen as a window for accelerating established policies and strengthening incremental policy reserves [15]. - The focus on debt issuance and its utilization is critical, alongside the potential for "quasi-fiscal" measures to be implemented more rapidly [15].