The Ministry of Finance: Continue to implement the special action plan for boosting consumption, and continue to implement a comprehensive debt-resolution policy package.

On November 7, the Ministry of Finance released a report on the implementation of China's fiscal policy for the first half of 2025. The report stated that since 2025, in the face of an increasingly complex and severe external environment, fiscal policy has become more proactive and continuously intensified, focusing on stabilizing employment, enterprises, markets, and expectations. It has strengthened coordination with other policies to drive sustained economic recovery and improvement.

Wall Street News summarized the key points as follows:

Make full use of a more proactive fiscal policy

The next step is to make full use of a more proactive fiscal policy. Strengthen the chain of responsibility for budget execution, organically combining the improvement of fund utilization efficiency with ensuring fund security, and promoting the swift implementation and effectiveness of funds and policies. Continue to implement special actions to boost consumption, providing fiscal subsidies for personal consumer loans in key areas and related business loans, stimulating the potential of service consumption such as elderly care and childcare. Actively leverage the role of local government special bonds and ultra-long-term special treasury bonds, strengthen fiscal and financial cooperation, include more public services within investment support, and actively encourage private investment growth.

Sustained efforts to prevent and resolve key risks, continuing to implement a comprehensive debt-resolution policy

The report pointed out that going forward, the Ministry of Finance will continue to focus on preventing and resolving key risks. A comprehensive debt-resolution policy will be implemented, while steadily advancing implicit debt swaps, and taking strict measures against new implicit debt behaviors, holding individuals accountable. Strengthen analysis and dynamic monitoring of fiscal operations, improve cash management and emergency response, and ensure the solid safeguarding of the 'three guarantees' bottom line and stable operation of grassroots finances. Make good use of relevant policy tools to assist in the reform and transformation of financing platforms, the reform and risk mitigation of small and medium-sized financial institutions, and the land acquisition and repurposing of existing commercial housing into affordable housing.

Accelerate the cultivation and expansion of new drivers of development

The report mentioned strengthening the supply of industrial innovation technologies, advancing breakthroughs in core technologies, actively fostering emerging and future industries, and continuously promoting the transformation and upgrading of manufacturing. Improve the allocation and management mechanisms of fiscal science and technology funding, strengthen the overall allocation of scientific and technological resources, and enhance the efficiency of science and technology investments. Increase support for the digital transformation of small and medium-sized enterprises (SMEs), promoting more SMEs to develop specialized, refined, distinctive, and innovative capabilities. Deeply advance the construction of a unified national market, treating all types of business entities equally in terms of fiscal subsidies and government procurement, creating a favorable environment for enterprise operations and development.

Below is the original text of the fiscal policy implementation report for the first half of 2025:

Report on the Implementation of China's Fiscal Policy in the First Half of 2025

Since 2025, facing a more complex and severe external environment, under the strong leadership of the CPC Central Committee with Comrade **** at its core, all regions and departments have adhered to the guidance of **** Thought on Socialism with Chinese Characteristics for a New Era. They have fully implemented the spirit of the 20th National Congress of the Communist Party of China and its subsequent plenary sessions, following the deployment of the Central Economic Work Conference and the Government Work Report. Upholding the general principle of pursuing progress while ensuring stability, they have comprehensively, accurately, and fully implemented the new development philosophy, coordinated domestic and international imperatives, balanced development and security, and accelerated the implementation of a more proactive macroeconomic policy, strengthening counter-cyclical adjustments. China’s economy has demonstrated strong vitality and resilience, achieving new successes in high-quality development. Fiscal policy has become more active and sustained, focusing on stabilizing employment, enterprises, markets, and expectations, while enhancing synergy with other policies to drive continuous economic recovery and improvement.

First, support was provided to comprehensively expand domestic demand. Greater emphasis was placed on boosting consumption. An allocation of 300 billion yuan in ultra-long-term special treasury bonds was made to support consumer goods trade-in programs, further expanding subsidy coverage. In the first half of the year, trade-in programs for related categories drove total sales of 1.6 trillion yuan. Efforts were made to combine livelihood benefits with consumption promotion, highlighting employment-driven income growth, continuously improving social security levels, and enhancing consumption capacity and willingness. Effective investment was actively expanded. Ultra-long-term special treasury bonds, local government special bonds, and central budgetary investments were used in a coordinated manner, with a focus on key areas and weak links to increase government investment and improve investment efficiency. The implementation of the national comprehensive freight hub chain enhancement action was advanced, further improving the integrated transportation system and promoting cost reduction and quality improvement in logistics. Special treasury bonds were issued to support large state-owned commercial banks in replenishing their core Tier 1 capital, continuously enhancing their ability to serve the real economy.

Second, the steady implementation of national major strategies was promoted. New forms of productivity were accelerated. A budget of 398.119 billion yuan was allocated for central-level science and technology expenditures in 2025, marking a 10% increase from the previous year, with further focus on basic research, applied basic research, and national strategic scientific and technological tasks. Support was provided for the implementation of high-quality development actions in key industrial chains in the manufacturing sector, driving industrial transformation and upgrading. Comprehensive rural revitalization was effectively advanced, strengthening the stable production and supply of grain and other important agricultural products, consolidating and expanding achievements in poverty alleviation, with a focus on enhancing industrial and employment assistance. Regional coordinated development was genuinely promoted, strengthening support for cross-regional major projects, advancing the construction of the Hainan Free Trade Port, and accelerating the development of old revolutionary base areas, ethnic minority areas, border areas, and resource-depleted areas. Effective support was provided for ecological civilization construction, intensifying efforts to promote ecological protection and restoration, steadily advancing carbon peaking and carbon neutrality, and improving the horizontal ecological protection compensation mechanism.

Third, efforts were focused on safeguarding and improving people's livelihoods. Policies such as tax and fee reductions, employment subsidies, and job stabilization refunds were comprehensively utilized to stabilize and expand employment with greater intensity. Efforts were made to enhance the quality of educational resources, promoting high-quality and inclusive development of preschool education, equitable and high-quality development of compulsory education, and diversified development of senior high schools, while improving student financial aid policies. The funding for basic public health services and the fiscal subsidy standards for urban and rural residents' medical insurance continued to be raised. The national minimum standard for urban and rural residents' basic pensions was increased, and the nationwide pension fund adjustment system was steadily implemented to ensure timely and full pension payments. The construction of an inclusive childcare service system was strengthened, a child-rearing subsidy system was established, and extensive development of inclusive elderly care services was promoted. Benefits and living allowances for entitled groups were implemented, ensuring the basic livelihood of disadvantaged populations. Grassroots emergency response capabilities were strengthened, with prompt allocation of central natural disaster relief funds to support emergency rescue operations and assistance to affected populations.

Fourth, key risks were effectively prevented and resolved. Financial resources were significantly decentralized to strengthen the tiered responsibility system, ensuring the 'three guarantees' at the grassroots level, with overall stable operation of local finances. Comprehensive debt resolution policies were implemented with meticulous attention, utilizing debt resolution quotas in advance through multiple measures to address existing hidden debts. High-pressure regulatory oversight was maintained to resolutely curb the addition of new hidden debts. The reform and transformation of local government financing platforms were accelerated. Collaborative efforts were made to prevent and resolve major financial risks. Tools such as local government special bonds, special funds, and tax policies were employed in combination to stabilize and revitalize the real estate market.

Fifth, fiscal management was strengthened scientifically. Comprehensive deepening of fiscal and taxation system reforms was pursued, modernizing the budget system, strengthening the coordination of fiscal resources, deepening zero-based budgeting reforms, and continuously advancing the construction of expenditure standard systems. The tax system was improved by accelerating the shift of certain excise tax collection points and transferring them to local authorities, while actively preparing for the legislation of excise tax, value-added tax, and others. The fiscal system was optimized, improving the fiscal transfer payment system, refining incentive and constraint mechanisms for high-quality development-related transfer payments, and deepening fiscal system reforms below the provincial level. Party and government agencies maintained stringent fiscal discipline, piloting scientific fiscal management, reinforcing accounting supervision, and enhancing fiscal governance effectiveness.

I. Overall Stability in Fiscal Operations with Good Budget Execution

In the first half of the year, China's economic operations progressed steadily, and fiscal operations remained generally stable. Fiscal departments at all levels strengthened the coordination of fiscal resources, maintained necessary expenditure intensity, and ensured better funding for key areas.

(1) Continuous recovery of fiscal revenue and gradual rebound of tax revenue.

In the first half of the year, national general public budget revenue amounted to 11.56 trillion yuan, a year-on-year decrease of 0.3%, with the decline narrowing by 0.8 percentage points compared to the first quarter.

First, tax revenue gradually recovered. In the first half of the year, national tax revenue reached 9.29 trillion yuan, a year-on-year decrease of 1.2%. Starting from April, monthly tax revenue showed year-on-year growth for three consecutive months, with increases of 1.9% in April, 0.6% in May, and 1% in June. During this period, major taxes grew steadily: domestic value-added tax, domestic excise tax, and individual income tax increased by 2.8%, 1.7%, and 8%, respectively; export rebates totaled 1.27 trillion yuan, an increase of 132.2 billion yuan over the same period last year, strongly supporting foreign trade exports. Tax revenues from equipment manufacturing, modern services, and other industries performed well, with tax revenue growth rates of 32.2%, 9.2%, and 6.3% in railway, ship, aerospace equipment, computer and communication equipment, and electrical machinery sectors, respectively. Tax revenue from scientific research and technical services grew by 13.8%, while that from culture, sports, and entertainment grew by 8.6%.

Second, growth in non-tax revenue of the general public budget slowed down. In the first half of the year, national non-tax revenue from the general public budget amounted to 2.27 trillion yuan, increasing by 3.7% year-on-year, with the growth rate declining by 5.1 percentage points compared to the first quarter. Specifically, general public budget non-tax revenue fell by 2.2% in May and 3.7% in June. Among the non-tax revenue items, income from the paid use of state-owned resources (assets) increased by 4.8%, mainly due to local governments diversifying asset revitalization channels, leading to increases in administrative and institutional state-owned asset disposals, rentals, and loans. Administrative and institutional fee income rose by 1%, with the growth rate declining by 4.5 percentage points from the first quarter. Fine and confiscation income decreased by 4.3%, with the decline widening by 2.9 percentage points compared to the first quarter.

Third, most regions maintained revenue growth. In the first half of the year, local general public budget revenue grew by 1.6%, including growth rates of 1.3%, 1.3%, 2%, and 5.7% in the eastern, central, western, and northeastern regions, respectively. Of the 31 provinces, 27 achieved positive growth.

(2) Expenditure intensity further increased, ensuring effective support for key areas.

In the first half of the year, national general public budget expenditure amounted to 14.13 trillion yuan, growing by 3.4%. Central government's general public budget expenditure reached 1.99 trillion yuan, increasing by 9%, while local government's general public budget expenditure was 12.14 trillion yuan, growing by 2.6%. The expenditure structure was continuously optimized to strengthen support for key areas. Social security and employment expenditure increased by 9.2%, education expenditure by 5.9%, health care expenditure by 4.3%, science and technology expenditure by 9.1%, energy conservation and environmental protection expenditure by 5.9%, and cultural tourism, sports, and media expenditure by 5%.

(3) Strengthening budget execution ensured timely allocation and effectiveness of funds.

Budget approvals were issued promptly to ensure early allocation and effectiveness of funds. By the end of March, budgets for central departments were approved. In the first half of the year, central-to-local transfer payments amounted to 9.29 trillion yuan, accounting for 89.8% of the initial budget, with the distribution progress improving by 1.7 percentage points compared to the same period last year.

II. Synergistic efforts to promote consumption and expand investment, further stimulating domestic market vitality.

Adhering to the strategic base of expanding domestic demand, efforts were coordinated on both the supply and demand sides to promote positive interactions between consumption and investment. The role of domestic demand as the main driving force and stabilizing anchor was better fulfilled.

(1) Adopting multiple measures to boost consumption.

First, intensifying and expanding support for the replacement of old consumer goods with new ones. In 2025, the central government has allocated 300 billion yuan of ultra-long-term special treasury bonds to support the replacement of old consumer goods, doubling the scale of funds compared to 2024. While continuing to support four major areas—automobiles, home appliances, home renovations, and electric bicycles—the program now includes additional support for purchasing new digital products such as mobile phones. In the first half of the year, two tranches of pre-allocated ultra-long-term special treasury bonds totaling 162 billion yuan have been disbursed, driving sales exceeding 1.6 trillion yuan and increasing the total retail sales of consumer goods by 5% year-on-year, which is 1.5 percentage points higher than the annual growth rate of last year.

Second, expanding consumer demand by ensuring and improving people's livelihoods. Emphasizing employment-driven income growth to enhance consumption capacity. Fully utilizing policies such as job stabilization subsidies, tax relief, guarantee loans, and employment subsidies to support improvements in employment services and vocational skills training. Strengthening the social security system by enhancing levels of pension, medical care, and social assistance to alleviate public concerns and bolster consumer confidence.

Third, promoting the release of consumption potential in counties and rural areas. In 2025, the central government allocated a total of 7.279 billion yuan in service industry development funds. Among this, 4.479 billion yuan was allocated to support the implementation of commercial development initiatives in counties across 27 provinces, including Hebei and Shanxi; 2.8 billion yuan was earmarked to initiate support for the second batch of pilot cities for modern commercial distribution systems, with 20 cities selected through competitive reviews to strengthen urban-rural distribution networks and build municipal supply assurance systems. In the first half of the year, consumption vitality in county and township markets continued to grow, accounting for 38.9% of total retail sales of consumer goods.

(2) Driving the expansion of effective investment.

First, leveraging the guiding role of government investment. The issuance of ultra-long-term special treasury bonds began in April, one month earlier than in 2024. By the first half of the year, 555 billion yuan had been issued, completing 42.7% of the annual issuance target, which is 17.7 percentage points faster than the same period last year. The newly added special debt limit of 4.4 trillion yuan was fully allocated to local governments in April. During the first half of the year, 2.16 trillion yuan in new special bonds were issued, achieving 49.1% of the annual limit, which is 11 percentage points faster than the same period last year. Local governments actively expanded the scope of special bond investments and their use as project capital, primarily targeting infrastructure construction, land reserves, and the acquisition of existing commercial properties for affordable housing. Central budgetary investment reached 460.1 billion yuan in the first half of the year, accounting for 63% of the annual budget, focusing on supporting projects related to modern industrial systems, modern infrastructure systems, new urbanization, and comprehensive rural revitalization.

Second, advancing the establishment of a modern integrated transportation system. In the first half of the year, the central government allocated 295.524 billion yuan for key transportation projects and special funds in the transportation sector to support the construction of road and waterway transportation infrastructure. Of this, 5.102 billion yuan was allocated to strengthen the integration and enhancement of national comprehensive freight hubs, improving the quality and efficiency of integrated freight transport services; 5.75 billion yuan was allocated to promote the digital transformation and upgrading of road and waterway transportation infrastructure. A civil aviation development fund of 30.75 billion yuan was arranged to support airport construction, operations of small and medium-sized airports, and subsidies for regional air routes. Additionally, 19.801 billion yuan in subsidy funds was provided to support the maintenance of ordinary national and provincial highways and rural roads.

Third, supporting new technological transformations in manufacturing. Twenty-six cities, including Dongguan, Yantai, and Wuxi, were selected to participate in the second batch of pilot cities for new technological transformations in manufacturing, guiding localities to create major exemplary projects in 'intelligent transformation, digital transition, and networked integration' to enhance the high-end, intelligent, and green development of manufacturing. In the first half of the year, this initiative drove a 10.3% increase in national industrial investment, a 7.5% increase in manufacturing investment, and a 3.6% increase in industrial technological transformation investment.

At the same time, strengthening fiscal and financial collaboration. A 500-billion-yuan special treasury bond was issued to inject capital into state-owned large commercial banks, continuously enhancing their ability to serve the real economy.

(3) Fully supporting stable foreign trade and foreign investment.

First, effectively leverage tariff control measures. Starting from January 1, 2025, provisional import tariff rates lower than the most-favored-nation (MFN) rates will be applied to 935 categories of goods, enhancing the linkage effects between domestic and international markets as well as resources. Expand the network of high-standard free trade zones, and implement tariff reductions with trading partners under 24 free trade agreements and preferential trade arrangements signed with 34 trading partners. Notably, the China-Maldives Free Trade Agreement will take effect and begin implementing tariff reductions on January 1, 2025; upon completion of the final phase of tariff reductions, nearly 96% of tariff lines will achieve zero tariffs for both parties. Timely and forcefully respond to external shocks, such as additional U.S. tariffs, by resolutely implementing counter-tariff measures against the U.S., safeguarding our legitimate rights and interests. Participate in China-U.S. economic and trade talks to promote significant tariff reductions and the extension of tariff suspension arrangements, strongly boosting market expectations and confidence in both countries and globally.

Second, strengthen the guiding and leveraging effects of fiscal funds and policies. Through the Innovation Development Guidance Fund for service trade, mobilize social capital to support innovation and development in service trade and expand overseas service markets. Deepen the implementation of demonstration projects to improve the quality and efficiency of foreign trade and economic cooperation, guiding localities to focus on key export-oriented industrial chains and implement a series of demonstrative projects to promote high-quality development of foreign trade and investment.

Third, introduce tax incentive policies. From January 1, 2025, to December 31, 2028, foreign investors who make new effective investments using domestically distributed profits during the 2025-2028 period will be granted a tax credit equal to 10% of their investment amount (or the agreed-upon tax rate if it is below 10%). Any unused portion of the credit can be carried forward.

III. Support the deep integration of scientific and technological innovation and industrial innovation to accelerate the cultivation and expansion of new productive forces.

Prioritize science and technology as key areas for preferential support, and comprehensively utilize various policy tools to promote the integrated development of scientific and technological innovation and industrial innovation, accelerating the realization of high-level self-reliance and strength in science and technology.

(1) Strengthen scientific and technological innovation capabilities, making robust strides toward high-level self-reliance and strength in science and technology.

First, continuously increase investment in basic research. Place greater emphasis on enhancing original innovation capabilities, with the 2025 central budget allocation for basic research increasing by 12.1% compared to the previous year. Provide stable support for research institutes and scientific talent. Improve the mechanism for investing in basic research that combines competitive and stable support, establish a diversified investment system, and guide and encourage society-wide increased investment in basic research.

Second, fully ensure funding for national strategic scientific and technological missions. Support breakthroughs in core technologies and proactively plan and implement several major national science and technology projects. Guarantee funding requirements for initiated national science and technology major projects, refine the management system for special funds related to these projects, and drive China to achieve important results in key areas such as artificial intelligence.

Third, promote the continuous growth of national strategic scientific and technological forces. Actively support the construction and development of national laboratories and coordinate the restructuring of national key laboratories nationwide. Provide stable support for the basic operations, independent topic selection, and research infrastructure of national scientific research institutions. Strengthen the position of enterprises as primary actors in scientific and technological innovation and guide them to undertake national research tasks. Support the implementation of relevant national science and technology talent programs.

Fourth, guide and support the transformation of scientific and technological achievements and regional scientific development. Continuously adjust and improve relevant policies, supporting researchers in owning the intellectual property rights or long-term usage rights of their scientific achievements, and accelerating the transformation of scientific achievements into real productivity. Advance the construction of regional innovation systems, allocating 6 billion yuan in central funds in 2025 to guide local scientific development, support regions in enhancing their scientific innovation capabilities, optimize and improve the regional innovation layout, promote the development of international and regional scientific innovation centers, and create distinctive regional innovation hubs.

Fifth, the effective use of cooperative innovation procurement methods. Guidance is provided for procurement projects suitable for adopting cooperative innovation in relevant central departments and local areas, with government 'orders' guiding and supporting product innovation and promotion, thereby driving innovative products to achieve a breakthrough 'from 0 to 1'.

(2) Guide industrial transformation and upgrading, with continuous optimization of the economic structure.

First, intensify support for addressing 'bottleneck' issues. Strengthen financial guarantees for key research and development plans and major projects in the manufacturing sector to enhance the resilience and security of industrial and supply chains.

Second, effectively promote high-quality development of small and medium-sized enterprises (SMEs). Reinforce the position of enterprises as innovation leaders, deeply implement incentive policies for specialized, refined, distinctive, and innovative SMEs, and reward a new batch of more than 1,200 'little giant' enterprises, fostering the cultivation of more innovative enterprises. Select 35 cities to conduct pilot programs for digital transformation among SMEs, accelerating their digital transformation process.

Third, fully leverage the role of government investment funds. Guide industry-focused government investment funds to support the deep integration of science and technology innovation and industrial innovation in key areas and critical links. Accelerate the establishment of a national venture capital guidance fund, focusing on early-stage, small-scale, long-term, and hard-tech investments, supporting innovative developments in strategic emerging industries and future industries, and expediting the realization of high-level technological self-reliance and strength.

(3) Implement pro-enterprise policies to continuously enhance corporate innovation vitality.

First, focus on key areas by implementing preferential income tax policies for high-tech enterprises, fully refunding input VAT credits monthly for sectors such as manufacturing, scientific research, and technical services, to enhance enterprise R&D and innovation capabilities.

Second, concentrate on critical links by implementing tax incentives for enterprises investing in basic research, additional deductions for R&D expenses, accelerated depreciation of fixed assets, one-time pre-tax deduction for equipment purchases, and other policies, encouraging enterprises to increase R&D funding.

Third, focus on the commercialization of results by allocating 173.4 billion yuan of ultra-long-term special treasury bond funds, extending the implementation period of fiscal interest subsidies for equipment renewal loans, promoting enterprises to purchase new equipment and apply new technologies; implement income tax exemptions for technology transfer by enterprises, VAT exemptions for taxpayers providing 'four-technology' services such as technology transfer, as well as tax incentives for national and provincial science and technology business incubators, university science parks, and nationally registered maker spaces, fostering integrated development between industry, academia, and research.

Fourth, focus on talent recruitment and utilization by implementing personal income tax incentives for high-end and urgently needed talents in specific regions such as the Guangdong-Hong Kong-Macao Greater Bay Area and the Hainan Free Trade Port.

Fifth, focus on financing development and continue to guide the national government-backed financing guarantee system in implementing special guarantee programs for scientific and technological innovation. Strengthen efforts to channel financial resources into supporting the financing and development of science and technology enterprises. In the first half of the year, the special guarantee program for scientific and technological innovation has supported 22,000 small and medium-sized enterprises in the science and technology sector, enabling them to secure loans totaling approximately RMB 90 billion.

Fourth, adhere to safeguarding and improving people's livelihoods through development, continuously enhancing the well-being of the population.

Uphold the commitment to safeguarding and improving people’s livelihoods in the context of high-quality development, increasing investment in key areas related to people's welfare. Focus on addressing pressing issues faced by the public, further improving the standards of basic medical care, education, and basic elderly care, and continuously enhancing living standards.

(1) Make greater efforts to stabilize and expand employment.

First, ensure robust financial support for employment. In the first half of the year, the central government allocated RMB 66.74 billion in employment subsidies to support local governments in implementing policies such as social insurance subsidies, vocational training subsidies, and public welfare job subsidies. Continue to implement demonstration projects aimed at enhancing public employment service capabilities, driving an overall improvement in national employment capacity. In the first half of the year, urban areas created 6.95 million new jobs, achieving 58% of the annual target.

Second, intensify measures to stabilize employment, support enterprises, and create more jobs. Extend reductions in unemployment and work-related injury insurance rates, increase the return of unemployment insurance funds to stabilize positions, expand the scope of social insurance subsidies and one-time job expansion subsidies, and continue policies such as the early issuance of employment internship subsidies. Promote the expansion and growth of entrepreneurship guarantee loans; in 2025, the central government allocated RMB 8.031 billion in rewards for entrepreneurship guarantee loans. By the first half of 2025, the national balance of entrepreneurship guarantee loans reached RMB 261.6 billion. Actively leverage the role of government-backed financing guarantees to stabilize employment, alleviating the difficulties and high costs of financing for small and micro enterprises. As of the first half of 2025, the National Financing Guarantee Fund had provided re-guarantee services with a cumulative scale exceeding RMB 6 trillion, serving over 500 million job opportunities, and reducing comprehensive financing costs to below 5%.

Third, strengthen employment assistance for key groups. Broaden employment channels for young people, including college graduates, and enhance employment support for disadvantaged groups such as disabled individuals and members of zero-employment households. Improve employment assistance mechanisms. Further expand pilot programs for occupational injury protection for workers in new forms of employment, planning to gradually extend the coverage of these pilots over three years.

Fourth, reinforce vocational skills training. Enhance mechanisms linking skills training to employment outcomes, promoting a shift from 'quantity' to 'quality' in vocational training. Coordinate funding and resources to implement the 'Skills Illuminate the Future' training initiative, providing large-scale vocational skills enhancement programs for key groups and intensifying training in urgently needed and scarce professions (occupations), cultivating more skilled talents.

(2) Promote the optimization and upgrading of educational resources.

First, continuously increase investment in education funding. Implement the 'Outline of the Plan for Building an Education Powerhouse (2024–2035)' and the 'Three-Year Action Plan for Accelerating the Construction of an Education Powerhouse (2025–2027),' adhering to the principle of 'one higher, two only increasing not decreasing,' and consistently increasing fiscal investment in education. In the first half of the year, national general public budget expenditures on education amounted to RMB 2.15 trillion, representing a year-on-year increase of 5.9%.

Second, support the widespread and inclusive development of preschool education. A fund of 22.5 billion yuan has been allocated to continue supporting localities in expanding the supply of inclusive preschool education resources and consolidating the funding system for groups such as children from economically disadvantaged families.

Third, accelerate the high-quality and balanced development of compulsory education. Urban and rural compulsory education subsidy funds totaling 179.432 billion yuan have been allocated to support localities in consolidating and improving the compulsory education funding guarantee mechanism and implementing policies such as 'two exemptions and one subsidy.' Starting from the spring semester of 2025, the standard for public funding subsidies for special education schools during the compulsory education stage will be increased from 6,000 yuan per student per year to 7,000 yuan. Continued support will be provided for the implementation of the Special Post Plan for Rural Compulsory Education Teachers and the Student Nutrition Improvement Plan. An additional 33 billion yuan has been allocated to improve weak links and enhance capacity in compulsory education, supporting ongoing improvements in basic schooling conditions in rural schools and the orderly expansion of urban school places.

Fourth, expand the supply of general high school educational resources. A fund of 13 billion yuan has been allocated to improve the operating conditions of general high schools, representing a 1-billion-yuan increase from the previous year. This supports localities in improving the basic operating conditions of county-level general high schools, accelerating the expansion of resource supply, and promoting diversified development in general high school education.

Fifth, promote high-quality development in modern vocational education. Guidance is provided to regions to establish differentiated per-student funding systems for vocational education based on major categories. A fund of 31.257 billion yuan has been allocated under the Modern Vocational Education Quality Enhancement Plan to support localities in raising per-student funding levels at vocational schools, deepening industry-education integration and school-enterprise cooperation, advancing the construction of world-class higher vocational schools and programs with Chinese characteristics, and enhancing the training of 'dual-qualified' full-time teachers.

Sixth, promote substantive development in higher education. Accelerate the establishment of universities and disciplines that are world-class and characterized by Chinese features. Advance reforms in clinical medical talent training, and support the strengthening of urgently needed high-level and top-tier talent cultivation. Support the implementation of breakthrough plans for fundamental and interdisciplinary subjects, as well as pilot projects aimed at enhancing the research and innovation capabilities of young faculty at central universities. Solid progress will be made in expanding high-quality undergraduate education. A fund of 40.387 billion yuan has been allocated to support the reform and development of local universities, encouraging greater investment in higher education and promoting improvements in the operational capabilities and standards of local institutions.

Seventh, adjust and improve student financial aid policies. Starting from the spring semester of 2025, the national student grant standard for senior high school education will be raised, and the coverage of national student grants for secondary vocational schools will be expanded. Beginning in 2025, the central government’s financial support standard for graduate academic scholarships at central universities will be increased, with allocations favoring fundamental disciplines, disciplines urgently needed by the nation (majors, directions), top-tier innovative talents, urgently needed scarce talents, and academic graduate students. A total of 75.7 billion yuan in student financial aid subsidies has been allocated to support the implementation of national financial aid policies for senior high school education, secondary vocational education, and higher education across regions. The policy of interest-free national student loans and deferred principal repayment will be extended, exempting loan interest for graduates from 2025 and prior years on their national student loans due in 2025, with principal repayments deferred by one year.

Eighth, strengthen the cultivation of highly qualified teaching staff. A fund of 2.2 billion yuan has been allocated under the National Training Program for primary and secondary school and kindergarten teachers to support in-depth implementation of the 'National Training Program,' with a focus on training rural backbone teachers. Continued support will be provided for the implementation of the Talent Support Program in 'three areas,' the Teacher Special Work Plan, and the Silver Age Teaching Program, aiming to enhance the quality of rural teaching staff.

(3) Precise guarantees for basic medical and health services.

First, continuously improve the quality and efficiency of public health services. In the first half of the year, the central government allocated 80.435 billion yuan in subsidies for basic public health services, increasing the per capita fiscal subsidy standard for basic public health services by 5 yuan compared to 2024, reaching 99 yuan per person annually. This supports regions in delivering basic public health services and strengthening resident health management. Additionally, 20.923 billion yuan in subsidies for major public health services was allocated to support the implementation of the national immunization program, control major infectious diseases such as HIV/AIDS, tuberculosis, schistosomiasis, and echinococcosis, and address mental health and chronic non-communicable disease prevention and treatment efforts.

Second, the healthcare service system continues to be strengthened. In the first half of the year, the central government allocated 9.115 billion yuan in subsidies for the essential medicines system to support regions in consolidating the outcomes of essential medicines system reform. Additionally, 34.533 billion yuan in subsidies for enhancing medical service and security capabilities was allocated to support comprehensive reforms in public hospitals, the training of health professionals, capacity building in medical and health institutions, medical security service capacity building, and the inheritance and development of traditional Chinese medicine.

Third, the level of basic medical security has been consolidated and improved. In the first half of the year, the central government allocated 377.544 billion yuan in subsidies for urban and rural residents' medical insurance, supporting an increase of 30 yuan in the fiscal subsidy standard to reach 700 yuan per person annually, ensuring stable enrollment rates in basic medical insurance nationwide. Additionally, 29.651 billion yuan was allocated for urban and rural medical assistance subsidies, enabling local governments to provide classified support for the personal contributions of disadvantaged groups participating in the urban and rural residents' medical insurance scheme. It also provided relief for out-of-pocket expenses that remained burdensome after insurance reimbursements, thereby strengthening the safety net function of medical assistance.

(4) Social security levels have steadily improved.

First, the pension security system has continued to improve. The national coordination of pension insurance has been implemented steadily, promoting the smooth operation of the fund. The basic pension levels for retirees were raised by 2% nationwide, while the national minimum standard for basic pensions for urban and rural residents was increased by 20 yuan. The central government further increased its subsidies to the basic pension insurance fund, allocating 1.1 trillion yuan in the first half of the year to ensure the timely and full payment of basic pension benefits across all regions. Efforts to accelerate the development of a multi-tiered and multi-pillar pension insurance system have continued, with ongoing strengthening of the 'third pillar' of pension insurance.

Second, social assistance and child welfare initiatives have progressed steadily. In the first half of the year, the central government allocated 156.683 billion yuan in subsidies for social assistance to vulnerable populations, supporting local governments in coordinating efforts related to subsistence allowances, assistance for those in extreme poverty, temporary aid, assistance for vagrants and beggars, and basic living security for orphans, as well as providing basic elderly care services for low-income disabled seniors and other groups. A total of 4.16 billion yuan was allocated for subsidies to renovate dilapidated houses in rural areas, benefiting key groups such as low-income households through house renovations and seismic retrofitting of farmhouses. Efforts have also been made to enhance welfare guarantees for children in difficult circumstances.

Third, preferential treatment for entitled groups has been effectively safeguarded. In the first half of the year, the central government allocated 62.67 billion yuan in subsidies for entitled groups and 2.26 billion yuan for their medical security, ensuring the timely and full payment of benefits to entitled individuals and helping eligible recipients address medical challenges. Additionally, 270 million yuan from the central lottery public welfare fund was earmarked to support projects enhancing the capabilities of preferential hospitals, including the procurement of commonly used medical (rehabilitation) equipment for 15 such hospitals to better meet the healthcare and caregiving needs of disabled veterans and other entitled groups.

Fourth, long-term progress has been achieved in basic elderly care services. In the first half of the year, the central government allocated 3.482 billion yuan to support localities in implementing home accessibility modifications for elderly families facing special difficulties, as well as upgrading facilities and equipment in elderly care institutions and training caregivers. Another 1.2 billion yuan was allocated to assist project areas in establishing home-based care beds and delivering in-home care services for economically disadvantaged, partially, or fully incapacitated elderly individuals. Plans are underway to formulate an implementation scheme for issuing elderly care consumption subsidies to moderately to severely incapacitated seniors.

(5) The public cultural service system has become more comprehensive.

First, people’s fundamental rights to public cultural services have been effectively guaranteed. An allocation of 22.71 billion yuan has been made to strengthen grassroots cultural development, continuing programs such as bringing traditional opera to rural areas and ensuring universal access to radio and television. Pilot reforms to upgrade rural libraries have also been supported. To date, approximately 50,000 grassroots cultural facilities nationwide—such as museums, memorial halls, public libraries, art galleries, and cultural centers (stations)—have been opened free of charge to the public, offering public lectures, exhibitions, and other essential cultural services.

Second, the provision of high-quality public cultural services has been expanded. A total of 2.933 billion yuan has been allocated for various artistic creation funds, including the National Arts Fund, the National Publishing Fund, the China Literature and Art Development Special Fund, and the Film Industry Development Special Fund. These resources aim to guide and support artistic production, resulting in more outstanding works that enrich the spiritual lives of the people.

Third, efforts to cultivate talented individuals in the cultural sector have been advanced. Support has been provided to train and deploy cultural professionals to frontline positions in revolutionary base areas, ethnic minority regions, border areas, and formerly impoverished regions, strengthening the talent pool at the grassroots level. Initiatives within the ideological and cultural domains have been organized to nurture skilled professionals, while state-owned performing arts troupes have received backing to foster a robust team of cultural talents.

Fourth, accelerate the construction of a sports powerhouse. A transfer payment of 3.983 billion yuan was allocated to the sports sector to support public sports venues in providing free or low-cost access to the public, and to help regions improve public sports facilities and national team training conditions, thereby promoting the comprehensive development of mass sports and competitive sports.

Fifth, promote the implementation of the national cultural digitalization strategy. Continuously advance the construction of the national cultural big data system, the nationwide smart library system, and the public cultural cloud, establishing cultural data service platforms. Support central cultural enterprises in driving integrated innovation and development, advancing cultural digitalization efforts, and promoting China’s excellent traditional culture.

(6) Strengthen efforts to reduce carbon emissions, control pollution, and expand green initiatives, supporting the comprehensive advancement of ecological civilization construction.

First, the battle against pollution prevention and control has been further implemented. A fund of 34 billion yuan was allocated for air pollution prevention and control, promoting coordinated governance of fine particulate matter and ozone, and focusing on key areas and major projects for air pollution control. In the first half of the year, the average concentration of PM2.5 in cities at or above the prefecture level nationwide was 32.1 micrograms per cubic meter, a year-on-year decrease of 2.4%; the proportion of days with good air quality reached 83.8%, up 1.0 percentage point year-on-year. A fund of 26.7 billion yuan was allocated for water pollution prevention and control, prioritizing the Yangtze River, Yellow River, and other key areas to comprehensively advance the governance of water resources, water environment, and water ecology through competitive evaluations to support the protection and construction of beautiful rivers and lakes. In the first half of the year, the proportion of surface water sections with excellent water quality nationwide reached 89%, up 0.2 percentage points year-on-year. A fund of 4.4 billion yuan was allocated for soil pollution prevention and control, supporting source prevention and risk management of soil pollution, with a focus on addressing historical issues such as heavy metal-contaminated tailings ponds, and promoting soil pollution traceability and risk management. In the first half of the year, soil environmental risks across the country were effectively managed, safe utilization of key construction land was ensured, and the overall condition of agricultural land soil remained stable.

Second, the construction of horizontal ecological protection compensation mechanisms has been steadily advanced. Together with relevant departments, we issued the 'Opinions on Further Improving Horizontal Ecological Protection Compensation Mechanisms' and the 'Implementation Plan for Promoting Horizontal Ecological Protection Compensation Mechanisms Along Major Rivers,' clarifying the work objectives, key tasks, and specific measures for the next phase of horizontal ecological protection compensation mechanisms. Guidance and reward funds were arranged to support local governments in establishing cross-basin horizontal ecological protection compensation mechanisms. To date, 24 provinces have established 30 inter-provincial basin compensation mechanisms, and provinces like Jiangsu, Fujian, Sichuan, and Yunnan have achieved full coverage of compensation mechanisms for key basins within their jurisdictions. A top-down interconnected, multi-level collaborative ecological environment governance framework has initially taken shape.

Third, ecosystem protection and restoration efforts have continued. A fund of 5.05 billion yuan was allocated to support local governments in comprehensively advancing the integrated protection and systematic governance of mountains, rivers, forests, farmland, lakes, grasslands, and deserts. A fund of 4.95 billion yuan was allocated to support pilot projects for the ecological restoration of abandoned mines with historical legacies, enhancing ecosystem quality and carbon sequestration capacity. A fund of 3.78 billion yuan was allocated to support coastal cities in conducting marine ecological protection and restoration, improving the quality of the marine ecological environment, and increasing the carbon sequestration capacity of marine ecosystems. A subsidy of 10 billion yuan was provided for the 'Three-North' project to support integrated protection and restoration of forests, grasslands, wetlands, and deserts, consolidate achievements in combating desertification, implement closure and protection compensation policies for desertified land, and promote 'ecological industrialization and industrial ecologization' incentive policies to reinforce the ecological security barrier in northern China. A fund of 86.7 billion yuan was allocated to advance the construction of nature reserve systems centered around national parks, scientifically carry out large-scale national greening initiatives, support camellia oil industry development, strengthen forest resource protection and restoration, and grassland ecological restoration and governance, implement subsidies for ecological forest rangers, enhance wetland protection and restoration, safeguard nationally important wild plants and animals, and strengthen forest and grassland fire prevention and pest control, providing strong support for forest and grassland ecological protection and restoration.

Fourth, the goals of carbon peaking and carbon neutrality are being steadily implemented. Continued emphasis is placed on ensuring key areas such as clean energy promotion and application, low-carbon transformation in key industries, and the consolidation and enhancement of carbon sequestration capabilities. A special fund of 5 billion yuan was allocated to guide relevant enterprises in standardizing the environmentally friendly dismantling of waste electrical and electronic products, promoting the recycling of solid waste resources. The National Green Development Fund plays a catalytic role in attracting social capital to increase investments in key areas like clean energy and green transportation. Accelerate the construction of the national carbon market, encouraging production factors to shift toward green and low-carbon sectors. Formulated and published the 'People's Republic of China Green Sovereign Bond Framework,' issuing the first green sovereign bond of 6 billion yuan in London, UK, in April this year, which received high praise from UK government departments, international organizations, and international investors.

Fifth, promote clean and efficient use of energy. Support increased reserves and production of unconventional natural gas to enhance domestic natural gas supply security. Support the development of renewable energy, maintaining global leadership in the scale and technical level of wind power, photovoltaic, and biomass electricity generation. Support fuel cell vehicle city cluster demonstrations, county-level charging infrastructure upgrades, vehicle replacement programs, new energy bus and battery updates, and continue to promote energy conservation and emission reduction in the transportation sector.

Sixth, government green procurement policies continue to improve. Procurement of 108 types of green building materials meeting standards was implemented in nine categories of government projects, such as hospitals, schools, office buildings, and gymnasiums, in 101 cities (city districts) nationwide. Vigorously develop new building industrialization methods such as prefabricated and intelligent construction, driving the green transformation and upgrading of the building materials industry. It is stipulated that the proportion of new energy vehicles in the annual total procurement of official vehicles should be no less than 30% in principle, supporting the promotion and application of new energy vehicles. Currently, the scale of government procurement of energy-saving and environmental protection products accounts for more than 85% of the procurement scale of similar products.

(7) Uphold the principles of putting people and life first, and support disaster prevention, mitigation, relief, and safety production work.

Support enhancing grassroots capacity for natural disaster prevention and control, specifying that from 2025 to 2028, funding will be provided for comprehensive disaster prevention capacity building in 200 counties characterized by 'three highs and one low' nationwide. Support comprehensive treatment of extremely large-scale geological disasters. Promote the construction of national integrated fire and rescue teams, advance the development of aviation emergency rescue capabilities, and support strengthening emergency material reserves. Support measures to prevent and curb major and especially serious production safety accidents. Fully commit to emergency disaster relief for major natural disasters. Efficiently and rapidly allocate central natural disaster relief funds; in the first half of the year, the rapid allocation mechanism was initiated eight times, with central natural disaster relief funds amounting to 725 million yuan being disbursed to support localities in carrying out emergency rescue operations and providing living assistance to affected populations, effectively responding to major natural disasters such as the Tingri earthquake in Tibet, landslides in Junlian (Sichuan), landslides in Bijie (Guizhou), and Typhoon 'Butterfly,' thereby ensuring the safety of people’s lives and property. Support efforts for agricultural disaster prevention, mitigation, and relief work, with a total allocation of 2.438 billion yuan to timely assist various regions in effectively responding to droughts and floods, major crop diseases and pests, etc.

V. Coordinately advancing new urbanization and comprehensive rural revitalization, achieving positive progress in coordinated urban-rural and regional development.

Actively leverage fiscal functions to comprehensively consolidate the foundation of food security, fully implement the rural revitalization strategy, steadily advance new urbanization construction, implement national major regional strategies, focus on addressing imbalances and inadequacies in development, and promote coordinated urban-rural and regional development.

(1) Ensuring stable and secure supply of grain and key agricultural products.

First, strongly promote the implementation of the 'storing grain in land' strategy. Arrange funds through multiple channels to vigorously advance the construction of high-standard farmland. Among this, transfer payment funds of 42.09 billion yuan and ultra-long-term special treasury bond funds of 134.487 billion yuan were allocated to improve the quality of arable land construction. Allocate 5.4 billion yuan to support black soil protection and utilization, steadily implementing the Northeast Black Soil Conservation Tillage Action Plan. Allocate 9.876 billion yuan to support crop rotation and fallow practices, promoting the sustainable use of arable land resources.

Second, support the deep implementation of the 'storing grain in technology' strategy. Strongly support the revitalization of the seed industry, promote the protection and utilization of germplasm resources, and facilitate major variety research and development and application integration projects. Allocate 20.795 billion yuan to implement subsidies for agricultural machinery purchases and applications, focusing on supporting the promotion and application of high-performance seeding machines, intelligent high-speed transplanters, and large-scale intelligent advanced combine harvesters, better meeting the urgent needs of agricultural production in hilly and mountainous areas, and accelerating the remediation of shortcomings in agricultural machinery equipment. Currently, the comprehensive mechanization rate of crop cultivation, planting, and harvesting nationwide exceeds 75%, with the comprehensive mechanization rate of wheat exceeding 97%.

Third, continuously improve the mechanism for safeguarding the income of grain-growing farmers. Allocate 121.485 billion yuan to stably implement subsidies for protecting cultivated land fertility, reinforcing the management of agricultural subsidies. Support the effective implementation of minimum purchase price policies for wheat and rice, refine subsidy policies for corn and soybean producers, and steadily implement rice subsidies. Fully leverage the role of agricultural insurance in supporting, benefiting, enriching, and strengthening agriculture. In the first half of the year, the premium scale of agricultural insurance in China exceeded 100 billion yuan, increasing by 5.4% year-on-year, providing risk coverage exceeding 3.3 trillion yuan for 84.25 million farming households. Among this, the premium scale of insurance for the three main grain crops exceeded 38 billion yuan, providing risk coverage of 812.9 billion yuan for 60.87 million farming households. Require underwriting institutions to follow the principles of 'fast compensation where possible, full compensation where due, and reasonable advance compensation' to promptly provide compensation to affected farming households. In the first half of the year, agricultural insurance cumulatively paid approximately 50 billion yuan in claims to nearly 11 million affected farming households.

Fourth, support stable production and supply of key agricultural products. Through various subsidy policies, support expanding the supply and promotion of high-quality sugarcane varieties, initiatives to increase quantity and improve quality in beef cattle and sheep production, and promote the stable development of sugar materials, rubber, livestock, fisheries, etc. Implement actions such as green high-yield efficient production of key crops like oilseeds and grains, improving yield per unit area for large-scale grain and oilseed growers, and subsidize intercropping soybeans and corn to promote extensive yield increases in grain and oilseed crops. This summer grain production achieved another bumper harvest, with output reaching 299.48 billion catties, making it the second-highest yielding year in history; summer oil acreage, yield per unit area, and total yield all achieved 'three increases,' laying a solid foundation for stable annual grain and oil production.

Fifth, fully mobilize local enthusiasm for prioritizing agriculture and grain production. Initiate the implementation of horizontal interest compensation between grain-producing and grain-consuming provinces under central coordination. Disburse reward funds to major grain-producing counties and launch pilot programs for improving grain circulation efficiency and effectiveness in 40 counties, ensuring that local governments benefit practically and develop sustainably from prioritizing agriculture and grain production.

(2) Promote the effective connection between consolidating and expanding poverty alleviation achievements and rural revitalization.

First, strengthen and consolidate the investment guarantees for transition. Maintain unchanged policies and unwavering efforts during the transition period, allocating 177 billion yuan of central fiscal funds to advance rural revitalization. Increase support for key groups such as those monitored for preventing a return to poverty, with fund allocation tilted towards key assisted counties for national rural revitalization and centralized resettlement sites for relocation. Establish and improve mechanisms for monitoring and assisting in the prevention of returning to poverty, effectively preventing large-scale re-poverty. As of the first half of the year, more than 6.8 million monitored subjects nationwide have been supported to steadily eliminate the risk of returning to poverty, and the scale of employment for the population lifted out of poverty reached 32.833 million people, surpassing the annual target.

Second, enhance financial support for revolutionary base areas. Allocate 2.4 billion yuan from the central special lottery public welfare fund to support rural revitalization projects in revolutionary base areas, providing additional subsidies to initiate rural revitalization projects in 48 revolutionary base area counties, continuing and consolidating projects started in the previous year, promoting the development of distinctive advantageous industries in the rural areas of these base areas, and exploring a comprehensive rural revitalization path with characteristics unique to these old revolutionary areas.

Third, enhance the endogenous development momentum of poverty-alleviated regions and their populations. Maintain a generally stable proportion of linked funds used for industrial development, focusing on nurturing and expanding distinctive advantageous industries in underdeveloped areas, improving farmer-linkage mechanisms, and promoting continuous income growth among the poverty-relieved population. At the same time, leverage tax incentives, government procurement, microcredit policies, etc., to guide and mobilize social and financial capital to assist in consolidating and expanding the achievements of poverty alleviation.

Fourth, focus on managing and tracking the effectiveness of linked funds. Collaborate with relevant industry departments to supervise and guide local governments in strengthening the management of linked fund usage, solidly conducting performance evaluations of linked funds for 2024, and enhancing the application of evaluation results. Regularly track the progress of fund disbursements and project implementation, promptly reminding and urging key provinces in collaboration with industry departments to ensure that linked funds deliver benefits as early as possible.

(III) Support the continuous improvement of rural industrial development, rural construction, and rural governance levels.

First, promote the integrated development of agricultural industries. Focus on building a modern agricultural industry system, strongly supporting the construction of modern agricultural industrial parks, distinctive advantageous industrial clusters, and strong agricultural towns, to promote the revitalization of rural industries. In the first half of the year, support was provided for the establishment of 50 new national modern agricultural industrial parks, 40 distinctive advantageous industrial clusters, and 198 strong agricultural towns.

Second, strengthen the protection of agricultural ecological resources. Adhere to the concept of green development, allocating 3.6 billion yuan and 2.773 billion yuan respectively to support scientific use and recycling of mulch films and the comprehensive utilization of crop straw, promoting the resourceful utilization of agricultural waste. Allocate 16.482 billion yuan to stably implement grassland ecological protection subsidy and reward policies, motivating herders to enforce grazing bans and restrictions.

Third, reinforce water conservancy infrastructure. Allocate 47.13 billion yuan of water conservancy development funds to support the improvement of water conservancy infrastructure systems and enhance national water security. Of this, 22.09 billion yuan is allocated for flood and drought disaster defense, including the management of medium and small rivers, key flash flood gullies, maintenance of flash flood disaster prevention facilities, etc., to promote enhanced basin disaster prevention and mitigation capabilities; 9.78 billion yuan is allocated for intensive and economical use of water resources, supporting the construction of small reservoirs and small-scale water transfer projects, as well as the renovation and water-saving retrofit of medium-sized irrigation areas; 15.26 billion yuan is allocated for water resources protection and restoration, supporting comprehensive soil erosion control, the construction of happy river-lake projects, and comprehensive treatment of excessive groundwater extraction.

Fourth, support the construction of a new agricultural operation system. Allocate 4.25 billion yuan to implement an agricultural credit guarantee business subsidy policy. In the first half of the year, the national agricultural guarantee system added 150.9 billion yuan in guarantee amounts, supporting 253,000 new agricultural entities, effectively alleviating difficulties and high costs of financing. Allocate 5.523 billion yuan to support family farms and farmers' cooperatives in improving production and operation levels and their ability to link and lead farmers. Allocate 8.204 billion yuan to support agricultural socialized services, focusing on addressing the mechanized and specialized service needs of small farmers in critical and weak links of important agricultural product production such as grain, cotton, oil, and sugar.

Fifth, further advance comprehensive rural reform. Allocate 29.213 billion yuan in transfer payment funds to implement fiscal award and subsidy policies for rural public welfare construction, accelerate the promotion of “village internal-outdoor” rural public welfare projects, continuously improve rural production and living conditions, deeply advance comprehensive rural reform and the two pilot projects of “Five Goods and Two Desirables” beautiful villages, creating exemplary samples of comprehensive rural revitalization. Urge and guide localities to implement a stable village-level organization operational funding guarantee system mainly based on fiscal input, stimulating the enthusiasm of village cadres for entrepreneurship and innovation.

(4) New urbanization construction has been steadily advancing.

First, the central government continues to support urban renewal initiatives. Efforts are underway to explore the establishment of a sustainable urban renewal mechanism, promote the improvement of urban infrastructure deficiencies, and strengthen the development of consumer-oriented infrastructure, aiming to create livable, resilient, and smart cities. In the first half of the year, through competitive reviews, 20 key cities were selected for the second batch of supported areas, with CNY 4.5 billion allocated to support both batches of selected cities in carrying out relevant work.

Second, support for urban infrastructure construction and renovation has been enhanced. In the first half of the year, approximately CNY 2.4 trillion was allocated from central budgetary investment, ultra-long-term special treasury bonds, and central fiscal subsidy funds to support projects such as the renovation of urban gas pipelines, the construction and upgrading of underground pipeline networks, and other initiatives that further enhance urban safety and resilience levels.

Third, efforts to advance the integration of the agricultural transfer population into urban citizenship have continued. In 2025, the central government allocated CNY 42 billion as an incentive fund for the urbanization of the agricultural transfer population. This allocation takes into account actual population mobility and local conditions, providing greater financial support to regions that absorb larger numbers of migrants and accelerating the equalization of basic public services.

(5) Implementation of major regional strategies has deepened.

Major regional strategies such as the coordinated development of the Beijing-Tianjin-Hebei region, the development of the Guangdong-Hong Kong-Macao Greater Bay Area, high-quality integrated development of the Yangtze River Delta, high-quality development of the Yangtze River Economic Belt, and ecological protection and high-quality development of the Yellow River Basin have been implemented. Efforts to revitalize key special-type regions have been promoted. In 2025, the central government allocated CNY 25.54 billion in transfer payments to revolutionary base areas, CNY 33.68 billion to border areas, and CNY 119.6 billion to ethnic minority areas, continuously enhancing the balanced development across regions.

Sixth, better coordination between development and security has been achieved, with strong and effective measures to prevent and resolve local government debt risks.

A government debt management mechanism adapted to high-quality development has been established and improved. Strict management of local government debt limits has been enforced, and the management system for special local bonds has been refined. Debt reduction is being carried out alongside development, and vice versa, providing robust support for steady and long-term economic progress.

(1) The policy on the replacement of hidden debts has been effectively implemented.

Guidance and supervision have been provided to local governments to scientifically categorize and precisely replace debts, strengthening the full-process regulation of bond issuance and fund usage to prevent deviations in policy implementation. A quota of CNY 2 trillion in local government debt limits has been arranged to replace existing hidden debts. In the first half of the year, local governments issued related replacement bonds totaling CNY 1.8 trillion, completing 90% of the 2025 quota. After replacement, the average interest cost of the debt has been reduced by more than 2.5 percentage points. The “multi-benefit” effect is accelerating, enhancing the transparency of local debt and facilitating unified debt management. It also significantly alleviates the pressure on local governments to repay principal and interest, freeing up more financial resources and policy space, unlocking local debt chains, and promoting the smooth functioning of microeconomic cycles. Meanwhile, the reform and transformation of financing platforms have been expedited, effectively improving the asset quality of financial institutions and enhancing their willingness and capacity to extend credit to the real economy.

(2) The supervision of special bond funds has been further improved.

Guiding local governments to continuously improve the management system for special bonds, optimizing the entire process management of 'borrowing, using, managing, and repaying' to better leverage the positive role of special bonds in strengthening foundations, addressing shortcomings, benefiting the public, and expanding investment. Jointly establishing with relevant departments a 'routine application, quarterly review' mechanism for project application and approval, promoting the dedicated account management and specific use of bond funds by local governments, further strengthening the supervision of special bond fund usage, and strictly preventing misappropriation, withholding, or diversion. Guiding local governments in managing assets of special bond projects and handling principal repayment and interest payments.

(3) The increase in hidden debt has been effectively curbed.

Strengthening budgetary constraints by treating the prevention of new hidden debt as an 'iron discipline,' continuously enhancing budget management, and urging local governments to undertake government investment projects lawfully and compliantly; no government expenditure items or investment projects not included in the budget shall be implemented, firmly blocking illegal and irregular local government borrowing channels. Strictly implementing lifelong accountability for government borrowing and a retroactive investigation mechanism for debt issues, establishing a closed-loop accountability mechanism for hidden debt, and comprehensively utilizing auditing, reviewing, verification, inspections, research, and supervision methods to improve the detection and collection of leads on new hidden debt. For behaviors such as adding new hidden debt and falsifying debt reduction, every case discovered will be investigated, held accountable, and subject to lifelong accountability and retroactive responsibility. Increasing the transparency of accountability results to serve as a warning and education, further enforcing financial discipline.

VII. Continuously deepening fiscal reforms and management to fully unleash the effectiveness of fiscal governance.

Emphasizing the organic integration of accelerating reform and promoting scientific fiscal management, continuously deepening fiscal and taxation system reforms, piloting scientific fiscal management, intensifying accounting supervision, and comprehensively enhancing the systematization, refinement, standardization, and legalization of fiscal management to better play the foundational and pivotal role of finance in national governance.

(1) Solidly advancing fiscal and taxation system reforms to accelerate the establishment of a modern fiscal system compatible with Chinese-style modernization.

First, the reform of the budget management system has been steadily advanced. Strengthening the coordination of fiscal resources, deepening the pilot reform of zero-based budgeting for central departments, continuously advancing the construction of expenditure standard systems, and expediting the formulation and application of fiscal standards. Deepening the reform of the government procurement system to promote the implementation of innovative procurement projects. Further advancing the integrated construction of budget management, improving the functional modules of the central budget management integration system, and accelerating the construction of functions such as government debt management, performance management, social insurance fund budget management, and internal control management.

Second, the reform of the tax system continues to deepen. Taking into account factors such as central-local revenue distribution and tax administration capabilities, accelerating the reform of shifting and delegating the collection points of certain excise taxes to local governments. Steadily clearing up and standardizing preferential tax policies. Actively preparing for the legislation of excise tax, revising the Tax Collection and Administration Law, accelerating the formulation of the implementation regulations of the Value-Added Tax Law, and establishing a sound system for internet platform enterprises to report tax-related information.

Third, the reform of the fiscal system is steadily advancing. Improving the central-to-local transfer payment system, increasing the scale of general transfer payments, and promoting more balanced fiscal capacities across regions. Implementing incentive and constraint mechanisms for transfer payments that promote high-quality development, guiding local governments to develop industries and cultivate sources of revenue. Deepening fiscal system reforms below the provincial level, standardizing fiscal powers, responsibilities, and revenue divisions at levels below the province.

(2) Strengthen the construction of a unified national accounting system and financial supervision, promoting the establishment of a stable and orderly financial order.

First, advance the improvement and effective implementation of a unified national accounting system. Vigorously promote the revised Accounting Law's dissemination and enforcement. Enhance the government accounting standards framework by issuing the 'Interim Regulations for Accounting Treatment of Local Government Special Bond Related Business.' Launch pilot projects on the accounting treatment of mining rights transfer, cost aggregation, and information disclosure in public data resource governance. Collaborate with medical security system reform to formulate relevant accounting methods and issue the 'Guidelines for Handling Transitional Issues Between Old and New Accounting Systems for Non-Profit Organizations.' Strengthen the corporate accounting standards system, focusing on reducing the implementation costs for small and medium-sized insurance companies. Organize research on industry-specific accounting manuals and provide practical guidance. Promote the development of accounting data standards, collaborating with relevant departments to issue the 'Notice on Promoting the Application of Electronic Voucher Accounting Data Standards,' and deepen pilot projects on enhancing credit through accounting data for small businesses, leveraging accounting data for financing and credit enhancement.

Second, enhance the role of financial supervision. Improve the financial supervision mechanism and continue to implement the 'Opinions on Further Strengthening Financial Supervision Work.' Coordinate revisions to laws and regulations such as the Budget Law, Certified Public Accountants Law, Asset Appraisal Law, and Regulations on Penalties for Fiscal Violations. Carry out special actions on financial supervision, cooperate with relevant departments to conduct routine governance of illegal activities in the certified public accountant industry and special rectifications in the agency bookkeeping industry, focusing on cracking down on practices like CPAs engaging in nominal practice. Optimize the industry’s practice environment. Increase the intensity of accountability notifications and penalties; impose administrative penalties on 285 accounting firms and asset appraisal institutions and 637 certified public accountants and asset appraisers, and announce 27 typical cases, playing a deterrent role of 'holding one accountable, warning many, and promoting improvements in one area.'

Third, solidify routine oversight of budget execution. Issue the 'Ministry of Finance’s Guidance on Further Strengthening Routine Supervision of Local Budget Execution' and the 'Operating Guidelines for Correcting and Rectifying Problems Found During Routine Budget Execution Oversight (Trial),' strengthening the institutional framework for routine budget execution oversight. Improve the functionality of the central department's budget execution monitoring module and the transfer payment monitoring module in the integrated budget management system, continuously optimizing early warning rules. Combine online monitoring with offline verification, strengthen daily oversight and process control, promptly correct deviations, and reinforce the foundational support for the execution of major national strategic tasks.

(3) Strengthen fiscal scientific management and continuously improve systematic, meticulous, standardized, and legal levels.

First, conduct pilots for fiscal scientific management. Starting from 2025, organize local fiscal scientific management pilots in 12 provinces, focusing on reform tasks deployed at the Third Plenary Session of the 20th CPC Central Committee and fiscal management needs. Set up 11 tasks including strengthening fiscal resources and budget coordination, implementing the requirement of living within tight means, and deepening zero-based budget reforms, aiming to achieve new progress and breakthroughs in key areas and important work of fiscal management within two years. Currently, all pilot provinces have issued their provincial fiscal scientific management pilot implementation plans, and the pilot work is proceeding steadily and orderly.

Second, conduct comprehensive budget performance management throughout the entire process. Strengthen ex-ante performance evaluations of new major policies and projects, reinforce performance target management, enhance performance operation monitoring, and promptly identify and adjust deviations during implementation. Improve the quality and effectiveness of performance evaluations by building a multi-level evaluation system encompassing self-assessment by units, departmental evaluations, and fiscal evaluations, and strengthen the application of evaluation results to drive the rectification and implementation of identified issues.

Third, enhance monitoring and analysis of local fiscal operations. Improve the central-local collaborative fiscal operation monitoring and management system, dynamically monitor local fiscal operations, timely detect potential risks, reinforce early warning alerts, and promote early response and resolution at the local level.

Fourth, strengthen state-owned asset management. Diligently implement the state-owned asset reporting system. Establish a nationwide platform for reallocating and sharing state-owned assets among administrative and public institutions, enabling cross-departmental, cross-level, and cross-regional reallocation and sharing. In the first half of the year, the platform gathered over 200,000 pieces of asset reallocation and demand information, completing more than 200 asset reallocations, saving over 40 million yuan in budget funds. Solidly manage budgeting and state-owned capital, concentrating state-owned capital in fields related to national security, economic development, and forward-looking strategic emerging industries. Establish and improve specific systems for managing assets formed by local government special bond investment projects. Actively advance pilot programs for full-process data asset management.

Fifth, deepen the management of state-owned financial capital. High-quality completion of reporting on the state-owned asset management of financial enterprises. Strengthen the financial management of state-owned financial enterprises, establish mechanisms to monitor financial risks, and continuously assess and analyze the operation status of state-owned financial capital. Intensify long-term assessments of state-owned commercial insurance companies, guide insurance funds towards long-term stable investments, and better leverage the stabilizing role of insurance funds in the market. Improve property rights management of state-owned financial capital, comprehensively standardize the appraisal and transfer behaviors of state-owned financial institutions, explore establishing a specialized property rights management evaluation mechanism, and improve the supervision of property rights trading institutions. Reinforce the responsibilities of equity directors and improve their working conditions. Enhance the rule of law in state-owned financial capital management, promote revisions to the 'Supervision and Management Measures for the Valuation of State-Owned Assets of Financial Institutions,' further strengthen supervision over the valuation of state-owned assets of financial enterprises, and effectively safeguard state-owned financial capital interests.

Sixth, steadily advance the work on government financial reporting. Improve the accrual-based comprehensive government financial reporting system and supplement and enhance the government financial statement framework. Solidly and orderly carry out the compilation and review of central and local government financial reports for 2024, with a focus on improving the quality of government financial report preparation.

VIII. Fiscal Policy Outlook

The year 2025 will be both the concluding year of the 14th Five-Year Plan and the planning year for the 15th Five-Year Plan. Going forward, the Ministry of Finance will adhere to **** Thought on Socialism with Chinese Characteristics for a New Era as its guiding principle, fully implement the spirit of the 20th National Congress of the Communist Party of China and subsequent plenary sessions, and remain committed to the goal of building a modern socialist country in all respects. It will pursue higher-quality fiscal policy formulation and implementation, enhance the effectiveness of macroeconomic fiscal regulation, and promote fiscal management and oversight at a higher level to lay a solid foundation for advancing Chinese-style modernization. Key efforts will focus on the following six areas:

(1) Make full use of a more proactive fiscal policy. Strengthen the chain of responsibility for budget execution by organically combining the improvement of fund utilization efficiency with ensuring fund security, thereby facilitating the rapid implementation of funds and policies. Continue to implement special actions to boost consumption, providing fiscal interest subsidies for personal consumer loans in key areas and related industry business loans to stimulate the potential of service consumption such as elderly care and childcare. Actively leverage the roles of local government special bonds and ultra-long-term special treasury bonds, strengthen the coordination between fiscal policy and financial measures, expand investment support to include more public services, and actively encourage private investment growth.

(2) Fully support employment stability and foreign trade. Intensify the implementation of employment stabilization policies, supporting public employment services, vocational skills training, job retention, and expansion efforts to stabilize employment opportunities through various means. Promote employment and entrepreneurship among key groups while ensuring the basic livelihood of unemployed individuals. Support enterprises in stabilizing orders, shifting to domestic sales, expanding markets, and maintaining operations, effectively addressing practical challenges. Utilize multilateral and bilateral financial cooperation mechanisms, promote the signing of more free trade agreements, and continuously deepen international economic and trade cooperation.

(3) Accelerate the cultivation and strengthening of new drivers of development. Enhance the supply of technological innovation in industries, advance breakthroughs in key core technologies, and actively foster emerging and future industries while continuously promoting the transformation and upgrading of manufacturing. Improve the allocation and management mechanisms for fiscal science and technology funding, strengthen the coordination of science and technology resources, and enhance the effectiveness of science and technology investment. Increase support for digital transformation among small and medium-sized enterprises (SMEs) and promote their specialized, refined, distinctive, and innovative development. Deepen the construction of a unified national market, treating all business entities equally in terms of fiscal subsidies and government procurement to create a favorable environment for enterprise operation and development.

(4) Further safeguard and improve people's livelihood. Strengthen services for the elderly and children by providing consumption subsidies for elderly care to moderately or severely incapacitated seniors, gradually implementing free preschool education, and enforcing a child-rearing subsidy system. Enhance interdepartmental coordination for major people-oriented policies, continuously improve support policies in key areas such as education and health, effectively expand social security coverage, provide bottom-line assistance to low-income groups, and ensure that people's livelihood construction is fairer, more balanced, inclusive, and accessible.

(5) Persistently prevent and resolve risks in key areas. Continue to implement a comprehensive debt resolution policy, steadily advancing the replacement of hidden debts while taking strict action against any new hidden debt behavior and holding parties accountable. Strengthen analysis and dynamic monitoring of fiscal operations, enhance treasury scheduling and emergency response, and ensure the firm establishment of the 'three guarantees' (wages, operations, and basic livelihood) baseline and stable operation of grassroots finances. Utilize relevant policy tools to assist in the reform and transformation of financing platforms, the restructuring and risk mitigation of small and medium-sized financial institutions, and the acquisition of land reserves and existing commercial housing for use as affordable housing.

(6) Continuously enhance the effectiveness and level of fiscal governance. Strengthen scientific fiscal management, deepen the implementation of various fiscal and tax reform measures, and strive for positive progress in areas such as fiscal resource and budget integration, zero-based budgeting, the fiscal transfer payment system, consumption tax reform, and the standardization of preferential tax policies. Intensify financial supervision, ensure thorough audit rectifications, and comprehensively enforce accountability across localities and departments to ensure prudent use of fiscal funds and enhance budget discipline and the enforcement of fiscal and tax regulations. Meanwhile, strictly adhere to the requirement of living within modest means, ensuring that fiscal funds are primarily allocated to areas critical for development and essential for people’s well-being.

Source: Ministry of Finance of the People's Republic of China, original title: "Guiding Opinions of the General Office of the State Council on Accelerating Scenario Cultivation and Opening-Up to Promote Large-Scale Application of New Scenarios"

Editor/Doris