Lou Jiwei pointed out that there have been some good changes in China's economic restructuring. In the first quarter, the contribution rate of consumption to GDP growth reached 55.5%, and the proportion of tertiary industry in GDP increased to 47.8%. In the past, investment and industry accounted for a large proportion and grew rapidly. Now the proportion of consumption and services is rising. It is believed that this trend will continue in the second quarter.
From the perspective of policy orientation, China will not introduce a large-scale fiscal stimulus policy this year. On the premise of maintaining the total size of the fiscal deficit, China will focus on promoting economic growth and employment and make some policy fine adjustments. This year's deficit accounted for 2.2% of GDP. The size of the deficit will remain unchanged, but the structure should be adjusted. The general expenditure of all departments of the central government decreased by 5%. In addition to wages, other funds, including local transfer payments, should be cut. At the same time, some tax reduction measures will be introduced, especially for small and medium-sized enterprises, so as to make them better contribute to promoting employment.
Lou Jiwei said that at present, the Chinese government is deepening reform, and the Ministry of finance is also brewing financial reform to support sustainable economic and financial development. The general direction is: first, adjust the expenditure responsibilities of the central government and local governments, appropriately increase the expenditure responsibilities of the central government, and ensure a more unified and fair market and the national equalization of basic public services. Second, improve the tax system and build a local tax system. The focus is to promote the complete transformation of value-added tax, extend value-added tax to all service industries, and include real estate in the scope of value-added tax deduction. This work is expected to be completed within one or two years, and the tax reduction is expected to be about 900 billion yuan. Third, accelerate the reform of the budget system, build a complete, standardized and transparent budget system, adjust the budget balance method, and improve the local government debt management system. Fourth, reform the pension and medical system to make it more sustainable. Generally speaking, without making major adjustments to short-term macroeconomic policies, we will mainly take measures to support growth and employment, and devote more energy to promoting the next round of reform.
In addition, Lou Jiwei also said that some countries expect China to act as a "locomotive" to lead the world out of the crisis, but China's role is limited. The Fed's QE exit should be as stable as possible. It is hoped that the US side will take into account the high spillover of US monetary policy, grasp the timing and rhythm of exit and reduce the impact on the market. We hope to strengthen international macroeconomic policy coordination with the United States, promote the deleveraging of international multilateral financial institutions and encourage them to expand loans.