Core Viewpoint - The 2025 Central Economic Work Conference emphasizes the need for proactive fiscal policies to stabilize and enhance economic growth, focusing on optimizing fiscal management and tax policies to support consumption and investment [1][2]. Fiscal Policy and Economic Growth - The conference highlights the importance of maintaining necessary fiscal deficits and optimizing the structure of fiscal expenditures to enhance macroeconomic governance [1]. - In 2024, China's GDP is projected to reach 134.9 trillion yuan, with a growth rate of 5%, driven by final consumption, capital formation, and net exports [1]. - Domestic demand contributed 70% to economic growth, serving as a stabilizing force [1]. Tax Policy and Consumption - The 2025 conference prioritizes domestic demand and plans to implement actions to boost consumption, including optimizing tax structures and enhancing income distribution [2]. - Tax policies can stimulate household consumption by increasing disposable income, particularly for low- and middle-income groups, who have a higher marginal propensity to consume [2][3]. - Reducing specific goods' tax rates can lower final prices, thereby stimulating consumer demand [4]. Investment and Economic Capacity - The conference calls for measures to stabilize and increase investment, which is crucial for both current demand and future production capacity [5][6]. - Increased investment leads to higher capital stock, enhancing productivity and economic potential [6]. - Tax policies that lower corporate tax burdens can encourage investment by improving after-tax returns [7][8]. Export and International Competitiveness - The conference emphasizes the role of exports in driving economic growth and improving international competitiveness through tax incentives [9][11]. - Export tax rebates and reductions in corporate income tax for export-oriented enterprises can enhance profitability and reinvestment capabilities [11][12]. - Recent improvements in export tax rebate processing times have positively impacted export sales revenue [12]. Structural Reforms and Future Directions - The focus is shifting from broad tax reductions to structural tax optimization, aiming to enhance consumer purchasing power and reduce business costs [16]. - The government plans to implement targeted tax incentives to support innovation and high-tech industries, promoting sustainable economic growth [15][16].