On March 5, the government work report submitted to the fifth session of the 13th National People’s Congress for deliberation put forward the main expected objectives of development in 2022, and made arrangements and arrangements for major macro policies. In addition, there are clear goals and measures in this year’s government work report to solve the “things that the masses are most concerned about and worried about”. The details are exciting and warm.

Detail 1: GDP growth from the perspective of downward adjustment

The government work report puts forward the main expected development goals for this year, of which the GDP will grow by about 5.5%. According to the government work report since 2017, except that the expected GDP target in 2020 is not mentioned, other targets are higher than 6%, which are about 6.5% (2017), about 6.5% (2018), 6% - 6.5% (2019) and more than 6% (2021). Why is the expected target lowered this year?

Zhang Liqun, a researcher at the Macroeconomic Research Department of the development research center of the State Council, believes that the expected target of about 5.5% reflects the principle of both positive and prudent. “It is positive that China’s GDP grew by 2.3% in 2020 compared with the previous year, and the GDP grew by 8.1% in 2021, and the average growth rate in 2021 was 5.1%, lower than the 5.5% growth target this year. The main reason is that China’s economic development is facing more complex and severe external environment, and the three pressures of demand contraction, supply shocks and expected weakness.”

“This year, the central government has allocated 640 billion yuan of investment in the central budget, 30 billion yuan more than last year. We should use major projects to stimulate government investment and activate the whole investment market.” Zhang Liqun suggested that this year we should focus on giving full play to the driving role of government investment, not only new infrastructure, but also transportation, water conservancy, energy, urban pipe network transformation and so on.

According to the government work report, the deficit ratio is planned to be about 2.8% this year, down from last year, which is conducive to enhancing fiscal sustainability. It is expected that fiscal revenue will continue to grow this year. In addition, specific state-owned financial institutions and franchised institutions will turn in the remaining profits in recent years according to law and transfer into the budget stability adjustment fund. The scale of expenditure will expand by more than 2 trillion yuan compared with last year, and the available financial resources will increase significantly.

“Based on the long-term positive fundamentals of China’s economy and greater policy support this year, China’s economic growth potential will be further released this year.” Zhang Liqun said.

Detail 2: the tax rebate and tax reduction is expected to be 2.5 trillion yuan, the highest in history

The government work report pointed out that the annual tax rebate and tax reduction is expected to be about 2.5 trillion yuan. Among them, the tax rebate is about 1.5 trillion yuan, and all the tax rebate funds go directly to the enterprise. Liu Kun, Minister of finance, introduced at the “Ministerial channel” of the national two sessions this year that the scale of tax rebate and reduction in 2022 is the highest in history.

Under the triple pressure of shrinking demand, supply shock and weakening expectations, the central government has increased tax cuts and fees, giving priority to providing cash flow support to small and micro enterprises. Liu Jianwen, Professor of Peking University Law School and President of the finance and Taxation Law Research Association of China law society, explained that “in the past two years, a major feature of tax reduction and fee reduction is more accurate, especially focusing on small and micro enterprises and focusing on supporting the manufacturing industry.”

The 2021 government work report pointed out that the threshold of value-added tax for small-scale taxpayers would be increased from 100000 yuan to 150000 yuan per month. It is worth noting that this year’s government work report “phased exemption of value-added tax” for small-scale taxpayers.

At the same time, all the remaining tax rebate funds go directly to the enterprises, so as to ensure that the key measure of tax rebate and tax reduction is implemented in place, provide help for the enterprises in the snow and help them revitalize.

“The simultaneous development of tax reduction and tax rebate and the expansion of the scale of tax rebate will help enterprises, especially small, medium and micro enterprises, solve the problem of cash flow.” Liu Jianwen said that before, the tax was levied and retreated, and the territorial tax rebate was adopted, with more intermediate links. If the local financial resources are tight, it is easy to fail to refund the tax in time or wait until the tax refund comes down, and the enterprise has reached the point of bankruptcy liquidation. Now all the tax rebate funds are directly connected to the enterprise, which is conducive to timely deliver cash flow for the enterprise and alleviate its liquidity pressure.

“From a deeper level, China will promote the reform of income distribution and tax system on the basis of tax reduction and rebate in the future, and improve the modernization and legalization of tax governance.” Liu Jianwen said.

Detail 3: don’t underestimate the 30 yuan “red envelope” in the government work report

“Compared with other figures of hundreds of millions in the government work report, the per capita financial subsidy standard for residents’ medical insurance and basic public health services will be increased by 30 yuan and 5 yuan respectively.” Zheng Gongcheng, deputy to the National People’s Congress and President of the China social security society, said that the national financial subsidy standard for residents’ medical insurance has increased from 240 yuan in 2012 to 610 yuan this year, with a growth rate of more than 1.5 times in ten years, which is a vivid embodiment of what the people call for and what the government should do.

Per capita financial subsidy standard of medical insurance for residents in China from 2012 to 2022 unit: Yuan

Data source: Ministry of human resources and social security, National Medical Security Bureau

According to the official website of the National Medical Security Bureau, affected by the epidemic, 1.99 billion people were treated in 2020, a decrease of 8.4% over the previous year. “Nevertheless, our country is still a country with a large population. The number of people participating in basic medical insurance is high. The fiscal expenditure of 30 yuan per capita seems small, but the total expenditure data is huge.” Zheng Gongcheng said that the increase of residents’ medical insurance benefits year after year has fundamentally solved the problem of medical security for the Chinese people.

One of the key contents of the government work report is to ensure and improve people’s livelihood. Netizens have said that the livelihood benefits distributed in the report are far more than 30 yuan: raising the basic pension for retirees; Bring seriously ill and disabled people from marginal families into the scope of subsistence allowances

“It can be seen that a sound social security system is conducive to promoting economic development.” Zheng Gongcheng analyzed that from the perspective of economic development, social medical security will also play a great role. Medicine and medical equipment related to medical treatment can promote the change of the whole economic development structure and provide new opportunities for China’s economic development.