Core Viewpoint - The Ministry of Finance released the "2025 Mid-Year Report on China's Fiscal Policy Execution," highlighting a proactive fiscal policy aimed at stabilizing employment, businesses, markets, and expectations, while promoting economic recovery [1][3]. Fiscal Policy Execution - The fiscal operation in the first half of 2025 was stable, with good budget execution and a gradual recovery in tax revenue [3]. - The central government allocated 300 billion yuan for long-term special bonds to support consumption, alongside 7.279 billion yuan for service industry development, aimed at stimulating rural and county-level consumption [4]. Investment and Consumption - The fiscal policy coordinated efforts to boost consumption and expand investment, with 42.7% of the annual issuance of special bonds completed in the first half, which is 17.7 percentage points faster than the previous year [4]. - The Ministry of Finance has implemented measures to support effective investment, including the issuance of special bonds for infrastructure and housing projects [4]. Trade and Tariff Adjustments - The Ministry effectively utilized tariff adjustments, implementing temporary import tax rates lower than the most-favored-nation rates on 935 items since January 1, 2025, to enhance the synergy between domestic and international markets [5]. Fiscal Management Pilot Programs - The Ministry initiated fiscal management pilot programs in 12 provinces to improve fiscal resource allocation and budget management, with a focus on achieving breakthroughs in key areas over two years [7][6]. Future Fiscal Policy Directions - The report outlines six key areas for future fiscal policy, including: 1. Utilizing more proactive fiscal policies to stimulate consumption and support key sectors [10]. 2. Supporting employment stability and foreign trade through enhanced public services and training [11]. 3. Fostering new growth drivers by promoting innovation and upgrading manufacturing [11]. 4. Improving social welfare services, particularly for the elderly and children [11]. 5. Preventing and mitigating risks in key areas through debt management policies [11]. 6. Enhancing fiscal governance and reforming tax policies [11].

Core Viewpoint - The report emphasizes that since 2025, China's fiscal policy has become more proactive, focusing on stabilizing employment, businesses, markets, and expectations, while enhancing coordination with other policies to promote sustained economic recovery [2][3]. Fiscal Policy Execution - The fiscal operation in the first half of 2025 was generally stable, with good budget execution and a continuous recovery in fiscal revenue, particularly in tax income [3]. - The central government allocated 300 billion yuan for long-term special bonds to support consumption, alongside 7.279 billion yuan for service industry development, aimed at stimulating consumption in rural areas [4]. Investment and Consumption - The fiscal policy has been working to boost consumption and expand investment, with the issuance of long-term special bonds starting in April, completing 42.7% of the annual issuance target in the first half, which is 17.7 percentage points faster than the previous year [4]. - A new special debt limit of 4.4 trillion yuan was fully allocated to local governments by April, achieving 49.1% of the annual limit in the first half, which is 11 percentage points faster than the previous year [4]. Foreign Trade and Investment - The Ministry of Finance has effectively utilized tariff adjustments to stabilize foreign trade and investment, implementing temporary import tariff rates lower than the most-favored-nation rates on 935 items since January 1, 2025 [5]. - The expansion of high-standard free trade zones and cooperation with trade partners on tax reductions has been highlighted as a strategy to enhance market confidence [5]. Fiscal Management Pilot - The Ministry of Finance has initiated a pilot program for fiscal management in 12 provinces, focusing on improving resource allocation and budget management, with 11 key tasks set to achieve breakthroughs in two years [7][8]. - A national platform for the sharing of state-owned assets has been established, facilitating over 200 asset adjustments and saving more than 40 million yuan in budget funds [8]. Future Fiscal Policy Directions - The report outlines six key areas for future fiscal policy, including the effective use of proactive fiscal measures, support for employment and foreign trade, fostering new growth drivers, improving living standards, risk prevention, and enhancing fiscal governance [11][12][13].