1. Report Industry Investment Rating No relevant content provided. 2. Core Viewpoints of the Report - In 2026, China's fiscal policy will balance short - term stimulus and long - term stability, focusing on both "activeness" and "sustainability", and shifting from "leveraging up" to "optimizing leverage". The fiscal situation will feature low revenue growth and rigid expenditure, with the revenue side facing challenges such as tax structure imbalance and weak non - tax revenue sustainability, while the expenditure side will see increased intensity in key areas and face issues like low - efficiency capital use and debt - servicing pressure [24][27][49]. - To address these challenges, the fiscal policy in 2026 should focus on boosting domestic demand, supporting infrastructure investment, fostering new - quality productivity, and promoting reform. Specific measures include expanding the expenditure scale, optimizing the expenditure structure, strengthening fiscal - financial coordination, improving transfer payment efficiency, deepening tax system reform, expanding zero - based budget reform pilots, and establishing a government asset - liability table for debt management [39][40][49]. 3. Summary by Relevant Catalogs 2025 Fiscal Operation Review Fiscal Operation Overview - Revenue: Generalized fiscal revenue declined for two consecutive years, falling short of the budget target by 860 billion yuan. General public budget revenue was 21.60 trillion yuan, a 1.7% year - on - year decrease, and government fund budget revenue was 5.77 trillion yuan, a 7.0% year - on - year decrease [8]. - Expenditure: Generalized fiscal expenditure increased slightly year - on - year but was 2.16 trillion yuan less than the budget target. General public budget expenditure was 28.74 trillion yuan, a 1.0% year - on - year increase, and government fund budget expenditure was 11.29 trillion yuan, an 11.3% year - on - year increase [9]. - Revenue - Expenditure Gap: The gap between actual generalized fiscal revenue and expenditure reached 12.65 trillion yuan, an increase of 1.3 trillion yuan from the previous year. Government bond issuance reached a record high, with national debt issuance at 16.01 trillion yuan and local government bond issuance at 10.31 trillion yuan [11]. Structural Characteristics of Fiscal Operation - Tax and Non - tax Revenue: Tax revenue increased by 0.8% year - on - year, with the four major taxes all showing positive growth. Non - tax revenue decreased by 11.3% year - on - year. The proportion of tax revenue in general public budget revenue rose to 81.6% [15]. - Livelihood and Infrastructure Expenditure: Livelihood expenditure remained a priority, with the combined expenditure on social security, employment, education, and health exceeding 10 trillion yuan, and the proportion increasing to 38.0%. Infrastructure - related expenditure decreased by 6.6% year - on - year, and its proportion dropped to 21.6%. Science and technology expenditure grew by 4.8% year - on - year, and debt - servicing pressure continued to increase [18][19]. - Central and Local Fiscal Expenditure: Central fiscal expenditure increased significantly, with the central government's generalized fiscal expenditure growing at 19.0%, much higher than the local government's 1.6%. The central government's government fund budget expenditure grew at 130%, far higher than the local government's 5.3%. The proportion of local fiscal expenditure in GDP decreased to 24.7% [21]. Fiscal Situation and Revenue - Expenditure Forecast for the "15th Five - Year Plan" Opening Year Fiscal Situation in 2026 - Revenue: Revenue will continue to grow at a low rate and show structural differentiation, with an increased reliance on debt funds. Tax structure imbalance remains prominent, non - tax revenue has weak sustainability, and government fund revenue is dragged down by land finance [25][26]. - Expenditure: Expenditure rigidity will increase, with key areas receiving more support. However, challenges such as low - efficiency capital use and debt - servicing pressure need to be addressed [27]. Revenue - Expenditure Growth Rate Forecast for 2026 - General Public Budget: Revenue may grow by about 0.5%, and expenditure may grow by about 2.6% [28][30]. - Government Fund Budget: Revenue decline may narrow to 5.9%, and expenditure may be roughly the same as in 2025, with a possibility of issuing additional government bonds during the year [34][35]. - Generalized Fiscal Revenue and Expenditure: Generalized fiscal revenue may decline by 0.84% year - on - year, and expenditure may grow by 1.55% year - on - year. The revenue - expenditure gap is expected to expand by over 800 billion yuan [37]. Core Demand Points for Fiscal Policy in 2026 - Boosting Micro - entity Confidence and Expanding Domestic Demand: Insufficient effective demand is the main contradiction. Fiscal policy should increase leverage, especially through the central government, and optimize the expenditure structure [40]. - Supporting Infrastructure Investment: In 2025, the expansion of generalized fiscal expenditure did not significantly improve investment. In 2026, fiscal expenditure should be expanded to create incremental demand and adjust the economic structure to support infrastructure investment [41]. - Fostering New - quality Productivity: China is in a critical period of new - old kinetic energy transformation. Fiscal policy should support the cultivation of new - quality productivity to make up for market failures and ensure key expenditures [46]. - Promoting Reform: Fiscal policy is essential for various reforms, such as income distribution, the construction of a unified national market, and the adjustment of central - local relations [47][48]. Fiscal Policy Outlook and Seven Key Measures in 2026 - Expand the Expenditure Scale and Act in Advance: The budget deficit rate is recommended to be 4% or above, with the central government taking the main responsibility. 5 trillion yuan of new special bonds and 1.8 trillion yuan of special treasury bonds should be issued. The generalized deficit may reach about 15 trillion yuan, an increase of over 1 trillion yuan from the previous year. The pace of fiscal expenditure and government bond issuance and use should be accelerated [53][55][56]. - Optimize the Expenditure Structure: Combine investment in physical assets and in people. Increase livelihood security expenditure, boost consumption, support infrastructure investment, and increase investment in new - quality productivity and the low - carbon economy. Special bonds should be optimized and their investment areas expanded [60]. - Strengthen Fiscal - Financial Coordination: Promote the coordinated implementation of fiscal and monetary policies. Use fiscal tools such as interest subsidies, rewards, and risk compensation, deepen the function of treasury bonds as a core link, and establish an evaluation and feedback mechanism. Explore financial cooperation models and tools to magnify the leverage effect of fiscal funds [62]. - Improve the Efficiency of Transfer Payments: Transfer payments may be arranged at over 10 trillion yuan. The structure of transfer payments should be optimized, the proportion of general transfer payments increased, and a direct - access mechanism for fiscal funds improved [63]. - Deepen Tax System Reform with Consumption Tax Reform: Speed up consumption tax reform, including the post - transfer of the collection link and the transfer to local governments. Cultivate local - specific main taxes and explore new taxes [64][65]. - Expand Zero - based Budget Reform Pilots: Expand zero - based budget reform pilots in an orderly manner, set phased and classified reform goals, and promote supporting system construction. At the same time, clarify the division of central - local fiscal powers and expenditure responsibilities [66]. - Establish a Government Asset - Liability Table: Establish and improve the government asset - liability table, promote debt risk resolution, and build a long - term debt management mechanism. Promote the transformation of government debt from leveraging up to optimizing leverage and address the root causes through deep - seated fiscal and tax system reforms [67][69].

Group 1 - The article discusses the strong fiscal support at the beginning of the year, indicating a significant increase in both narrow and broad fiscal deficits, with a narrow deficit of 255.2 billion and a broad deficit of 1,036.3 billion in January-February, marking the highest broad deficit in recent years [2][12][18] - The fiscal expenditure growth rate for January-February reached 6.1%, the highest since 2022, reflecting a proactive fiscal stance compared to previous years [2][12][18] - The increase in infrastructure investment is attributed to both funding availability and a robust project pipeline from both central and local governments, with central projects approved totaling approximately 295 billion and local projects supported by two 500 billion policies [3][4][15] Group 2 - The article highlights that the fiscal funding available for infrastructure projects is expected to grow by 9.7% this year, the highest since 2022, driven by the carryover of previous policies and new financing tools [5][18][19] - The article notes that while the funding situation is favorable, local governments face pressure with conservative project investment targets, particularly in major provinces, indicating potential challenges in sustaining high growth rates [20][21] - The analysis of January-February fiscal data shows a positive turnaround in tax revenue, particularly from foreign trade and price-related taxes, contributing to a 0.7% year-on-year increase in public fiscal revenue [31][33][34] Group 3 - The article points out that government fund income continues to decline, particularly from land sales, which dropped by 25.2% in January-February, impacting overall fiscal revenue [51][53] - The issuance of new special bonds has accelerated, with a total of 824.2 billion issued in January-February, compared to 596.8 billion in the same period last year, contributing to a significant increase in government fund expenditures [51][52] - The article emphasizes the importance of monitoring the progress of major projects and the approval of new projects by the National Development and Reform Commission, as these factors are crucial for sustaining infrastructure growth [21][24]

Group 1: Fiscal Performance Overview - The growth rate of broad fiscal expenditure in January-February exceeded budget targets, indicating proactive fiscal measures to support economic growth, with total expenditure increasing by 6.1% year-on-year against a budget target of 4.6%[13] - General public budget revenue for January-February was 4.4 trillion yuan, a year-on-year increase of 0.7%, while expenditure was 4.7 trillion yuan, up 3.6% year-on-year[7] - The first account expenditure grew by 3.6% year-on-year, while the second account expenditure surged by 16%, primarily due to the early issuance and timely use of local special bonds[13] Group 2: Revenue Insights - Tax revenue remained nearly flat, with a slight increase of 0.1% year-on-year, while non-tax revenue saw a significant rise of 3.4%[13] - Among major tax categories, only value-added tax maintained positive growth, while consumption tax, corporate income tax, and personal income tax all experienced declines[9] - The securities transaction stamp duty saw a remarkable year-on-year increase of 110%[10] Group 3: Expenditure Trends - Infrastructure spending turned positive with a year-on-year increase of 2.4%, reversing a previous decline of 6.6% in 2025[14] - Social security and health care remain key areas of focus, contributing 1.6 percentage points and 1.3 percentage points to public fiscal expenditure growth, respectively[14] - Interest payment expenditure increased by 22% year-on-year, accounting for 4.1% of total fiscal expenditure, raising concerns about future debt servicing pressures[14] Group 4: Land Sales and Special Bonds - Land sale revenue decreased by 25% year-on-year, significantly impacting fund income, which fell by 16%[14] - Fund expenditure increased by 16%, with 60% supported by special bonds, highlighting the reliance on these instruments for funding[14] - The total quota for local special bonds remains at 4.4 trillion yuan, balancing multiple objectives including project construction and debt repayment, suggesting limited high growth potential for these bonds throughout the year[14]

Fiscal Structure - China's fiscal system consists of four budgets: General Public Budget, Government Fund Budget, State Capital Operations Budget, and Social Insurance Fund Budget, each serving distinct functions and interlinked[7] - The General Public Budget primarily relies on tax revenues, while the Government Fund Budget is mainly supported by land sales[8] Revenue and Expenditure - In 2024, the General Public Budget's revenue and expenditure will account for 54% and 60% respectively, while the Government Fund Budget will account for 15% and 21%[20] - Major sources of revenue include four key taxes and land finance, which together represent approximately 50% of total revenue, with insurance and interest income making up about 25%[8] - Expenditure in 2024 will see traditional infrastructure and real estate spending at about 25%, while social security and livelihood spending will account for approximately 30%[8] Fiscal Deficit and Reform - China is expected to maintain a "big fiscal" approach, with a projected general deficit rate of around 10% in 2025, which is considered high compared to historical and global standards[9] - Continuous fiscal reform is necessary, focusing on establishing a tax system that aligns with high-quality development and new business models[9] Local Government Finance - Local governments play a crucial role in China's fiscal system, with a significant portion of their expenditures being financed through deficits, nearing 50% of total expenditures[10] - By 2025, some local fiscal indicators are expected to improve marginally, although the overall tight fiscal situation remains a challenge[10]

Core Viewpoint - The Hong Kong government plans to issue bonds to fund infrastructure projects, particularly in the Northern Metropolis, while maintaining a stable debt-to-GDP ratio over the next five years [1] Group 1: Bond Issuance and Debt Management - The bond issuance policy will be exclusively for infrastructure investment and will not be used for daily operational expenses [1] - The government debt-to-GDP ratio is projected to rise from 14.4% to approximately 19.9% in five years, which is still considered a robust level [1] - The government expresses confidence in its ability to repay the debt through economic growth and investment returns [1] Group 2: Development of Northern Metropolis - The development of the Northern Metropolis is being accelerated to attract businesses, technology companies, and manufacturing industries, which will contribute to job creation, tax revenue, and GDP growth [1] - Investment in the Northern Metropolis is viewed as a key growth engine for Hong Kong over the next 20 years [1] Group 3: Economic Stability and Geopolitical Risks - The financial system in Hong Kong is described as stable and robust, but geopolitical uncertainties are expected to persist [1] - The government aims to ensure sufficient buffers to address potential market fluctuations arising from challenges, such as last year's tariff wars, which led to significant capital inflows into Hong Kong [1] Group 4: Community Engagement and Land Use - In response to community concerns regarding the redevelopment of Tai Po Hung Fuk Court, the government has conducted surveys to understand residents' preferences [1] - Various options have been provided to residents, emphasizing that land will not be wasted; if residential construction does not occur on the original site, it may be repurposed for community facilities or parks [1]

Group 1 - The IMF advises Japan to avoid cutting consumption tax to prevent exacerbating fiscal risks, highlighting that such a measure is not targeted and could erode fiscal space [1] - The IMF predicts that Japan's public debt interest payments will double by 2031 due to refinancing at higher yields, with current estimates indicating interest payments will rise from 21.6 trillion yen to approximately 41.3 trillion yen by FY2029 [1][2] - The IMF acknowledges that limiting tax suspension to food and maintaining its temporary nature could help mitigate fiscal impacts, while recommending budget-neutral and time-limited measures targeting vulnerable households and businesses [2] Group 2 - The IMF urges Japan to adopt a credible medium-term framework with clear fiscal targets, as Prime Minister Kishi Sanae focuses on reducing the national debt-to-GDP ratio [2] - The IMF calls for the government to control additional budgets to reduce the risk of sudden fluctuations in the Japanese government bond market, which faced pressure following Kishi's expansionary policies [2] - The IMF expects Japan's main price index to reach the Bank of Japan's 2% target by 2027, despite temporary relief from food and energy effects in 2026 [3] Group 3 - The IMF welcomes the Bank of Japan's actions over the past year, noting its return to tightening policy in December after pausing rate hikes during global uncertainty [2][3] - The IMF emphasizes the importance of the Bank of Japan's independence and credibility in maintaining stable inflation expectations [3] - The IMF supports Japan's commitment to a flexible exchange rate system, which is crucial for absorbing external shocks and allowing monetary policy to focus on price stability [3]

Group 1 - The report indicates that the fiscal policy for 2025 was more proactive, with a general public budget deficit increasing by 1 percentage point to 4%, and the broad fiscal deficit reaching a historical high of 12.1 trillion yuan [2][3] - In 2025, the broad fiscal revenue decreased by 2.2% year-on-year, with a shortfall of 640 billion yuan compared to the initial budget, primarily due to pressures from real estate adjustments and insufficient domestic demand [3][4] - The report forecasts that in 2026, broad fiscal expenditure growth will accelerate to 3.3%, driven by a recovery in fiscal revenue and a slight expansion in government bond issuance, with the broad deficit rate expected to decrease from 8.6% in 2025 to 8.2% [2][42] Group 2 - The report highlights that the decline in broad fiscal revenue was exacerbated by a drop in real estate and weak domestic demand, with total fiscal revenue falling by 2.9% to 27.4 trillion yuan in 2025, which is equivalent to 0.6% of GDP [3][4] - Tax revenue, which constitutes 81.6% of general public budget revenue, grew by only 0.8% in 2025, significantly below the budget target of 3.7%, leading to a shortfall of 509.7 billion yuan [4][6] - The report notes that the macro tax burden rate further declined, with general public budget revenue as a percentage of GDP dropping from 16.3% in 2024 to 15.7% in 2025, indicating a need for sustainable fiscal expenditure in the future [6][40] Group 3 - The report states that fiscal expenditure growth in 2025 rebounded, with total expenditure increasing by 3.7% to 40.0 trillion yuan, supported by local government special bonds and special treasury bonds [17][18] - The structure of fiscal expenditure is shifting towards "investment in people," with increased allocations for social security, employment, and healthcare, reflecting a focus on enhancing public welfare [19][20] - The report anticipates that the fiscal policy for 2026 will continue to emphasize "quality improvement and efficiency enhancement," with a focus on optimizing expenditure structure and ensuring that total expenditure does not decrease [42][46]

Core Viewpoint - The Qinghai Provincial People's Congress is focusing on enhancing the quality of development in the cultural and tourism industry, emphasizing the importance of representative suggestions in driving local development and addressing public needs [4]. Group 1: Mechanism Improvement - The Provincial People's Congress is committed to strengthening the representative suggestion process by establishing a robust mechanism that ensures high-quality suggestions are prioritized and effectively managed [4][7]. - A new set of guidelines has been developed to enhance the connection between specialized committees and representatives, aiming to improve the flow of public opinion and the management of suggestions [4]. Group 2: Training and Capacity Building - The Provincial People's Congress has implemented a comprehensive training program for representatives, achieving nearly full coverage of grassroots training through both online and offline methods [5]. - Over 1,200 representatives have been trained, with specialized sessions focusing on high-quality suggestion development [5]. Group 3: Quality Control - A strict quality control mechanism has been established, ensuring that suggestions meet political, formatting, and content standards before they are processed [7]. - During the recent session, 335 suggestions were submitted, with 263 officially assigned for processing, reflecting a shift in focus towards modern industrial systems and improving the business environment [7]. Group 4: Supervision and Coordination - The Provincial People's Congress has enhanced its supervision of suggestion implementation, transitioning from addressing isolated issues to tackling broader systemic problems [8]. - A high-level oversight approach has been adopted, with provincial leaders actively involved in monitoring the progress of key suggestions [8]. Group 5: Effective Implementation - Various departments have recognized the importance of addressing representative suggestions as a key responsibility, leading to improved mechanisms for tracking and reporting on the status of suggestions [10]. - By the end of the last year, 263 suggestions had been completed, with a high satisfaction rate among representatives regarding the outcomes [11]. Group 6: Evaluation and Feedback - A three-tier evaluation system has been established to assess the effectiveness of suggestion handling, ensuring continuous improvement based on representative feedback [12]. - The selection of outstanding cases has been initiated to highlight high-quality suggestions and their successful implementation, enhancing the sense of responsibility among departments [12]. Group 7: Future Directions - The Provincial People's Congress aims to leverage the spirit of the 20th National Congress to further engage representatives in the modernization efforts of Qinghai, focusing on consolidating and expanding existing achievements [13].

Core Insights - Shenzhen's budget report for 2025 and draft for 2026 highlights a strong financial position with a general public budget revenue of 11,302 billion yuan in 2025, marking five consecutive years above 10,000 billion yuan [1] - The report emphasizes a focus on enhancing public welfare and economic development through strategic fiscal policies and spending [6] Revenue Structure - Shenzhen's local revenue reached 4,163.8 billion yuan in 2025, reflecting a growth of 6.4%, with tax revenue contributing 3,510.6 billion yuan, a 7.5% increase, and non-tax revenue at 653.1 billion yuan, growing by 0.6% [1] - Tax revenue accounts for 84.3% of the local revenue, positioning Shenzhen's revenue structure among the best in the country [1] Expenditure Overview - The total general public budget expenditure for 2025 is set at 4,502.5 billion yuan, with nine categories of public welfare spending amounting to 3,048.8 billion yuan, representing 67.7% of total fiscal expenditure [3] - Key areas of spending include education, healthcare, and social welfare, with initiatives for free preschool education and enhanced healthcare funding [3][6] Debt Management - Shenzhen's local government debt limit for 2025 is set at 1,063 billion yuan, with all issued bonds comprising 68 billion yuan in general bonds and 995 billion yuan in special bonds [4] - The focus on special bonds aims to support infrastructure, social welfare, and investment expansion [4] Future Fiscal Policies - For 2026, Shenzhen plans to maintain a proactive fiscal policy, with public welfare spending expected to remain around 65% of total fiscal expenditure [6] - The city aims to stimulate consumption through fiscal subsidies and support for various sectors, including automotive and electronics [8] - There is a commitment to fostering a modern industrial system and enhancing the business environment for private enterprises [8]

Core Viewpoint - The local economic work "roadmap" for 2026 indicates a commitment to maintaining growth momentum, optimizing structures, investing in people, ensuring livelihoods, deepening reforms, and enhancing economic dynamism through integrated effects of existing and new policies [1][2][4]. Group 1: Local Revenue Growth - Local revenue growth is supported by the recovery of economic operations, with nearly 90% of regions reporting income increases in 2025 [1][2]. - Beijing's general public budget revenue grew by 4.8%, while other provinces like Guangdong and Fujian saw increases of 3% and 3% respectively, reflecting a stable growth trend across various regions [2][3]. Group 2: Fiscal Policy and Expenditure - The central economic work conference has mandated the continuation of a more proactive fiscal policy in 2026, focusing on maintaining necessary fiscal deficits and total debt levels [2][4]. - Local governments are increasing expenditure intensity and optimizing spending structures, particularly in key areas such as livelihood and technology, to effectively expand domestic demand and promote high-quality economic development [2][3]. Group 3: Investment in People and Livelihood - A significant portion of budget expenditures is directed towards improving livelihoods, with over two-thirds of Zhejiang's general public budget allocated for this purpose [3][4]. - Fiscal policies are designed to enhance basic social security and boost residents' consumption capacity, thereby stimulating market activity [3][4]. Group 4: Reform and Economic Dynamism - Implementing a more proactive fiscal policy is crucial for stabilizing economic growth, with an emphasis on policy support and reform innovation [4]. - Key reform initiatives include "scientific fiscal management" and "zero-based budgeting," aimed at optimizing expenditure structures and improving the efficiency of fiscal funds [4].