Summary

2020 was an unusual year in the history of the People's Republic of China. Against the complicated global landscape, challenging tasks in pursuing reform, development and stability at home, and heavy blows from the COVID-19 pandemic in particular, the Communist Party of China (CPC) Central Committee with Comrade Xi Jinping at the core kept the whole picture in mind as it charted the course of national development, rallied the whole Party and the nation to forge ahead and blaze new trails of innovation, and advanced the great causes of the Party and the country with innovation and an enterprising spirit able to overcome risks and challenges. The country secured major strategic gains in the fight against COVID-19, scored decisive successes in the three critical battles against poverty, pollution and potential risks, and made major progress in scientific and technological innovation. Significant breakthroughs in reform and opening up were achieved with solid improvement in people's livelihoods, and the economy is now on a steady recovery path. In 2020, China's gross domestic product (GDP) grew by 2.3 percent year on year, making it the only major economy in the world to achieve positive growth.

Under the strong leadership of the CPC Central Committee, the Ministry of Finance (MOF) has always adhered to the guidance of Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era, and actively ensured that its fiscal work fit well into the national strategies of building a moderately prosperous society in all respects and developing a modern socialist country. The ministry has risen to challenges with courage and responsibility, coordinated pandemic prevention and control with economic and social development, and delivered remarkable results on all fronts.

The first step was to put pandemic prevention and control at the top of its agenda. MOF unveiled at the earliest moment the "Two Guarantees" policy for free treatment of all COVID-19 patients and adequate funds for the government’s pandemic fight across the country. The ministry beefed up its financial and tax policy support and stepped up efforts in policy explanation and publicity to fully support the country’s fight against the pandemic.

The second task was to step up policy countermeasures. MOF increased the fiscal deficit ratio to over 3.6 percent, issued 1 trillion yuan of special treasury bonds for COVID-19 control, and added 1.6 trillion yuan of local government special bonds. The ministry swiftly introduced large-scale relief policies for enterprises, and creatively established new fiscal mechanisms for direct funding as strong and effective response to the pandemic’s impact.

The third measure was to strengthen support for national strategies so as to ensure a decisive success in the fight to eliminate absolute poverty as scheduled, significant improvement in the environment, steady progress in preventing and defusing major risks, and success in the last-mile dash to build a moderately prosperous society in all respects.

The fourth measure was to guarantee people's basic livelihoods, make great efforts to stabilize enterprises and employment and to achieve solid progress in the “three priorities” of safeguarding people’s livelihoods, income and the smooth functioning of institutions at the primary level, steadily improve the basic livelihood security level, and resolutely safeguard the bottom line in maintaining security in six areas: jobs, basic living needs, operations of market entities, food and energy, stable industrial and supply chains, and the normal functioning of primary-level governments.

The fifth step was to deepen supply-side structural reform, vigorously support technological innovation, accelerate the transformation and upgrading of the manufacturing industry, support the relief and development of small and micro enterprises, strengthen food and energy security, and enhance innovation and competitiveness in the country’s real economy.

The sixth measure was to deepen reform and opening up, steadily advance the reform of the fiscal and taxation system, continue to deepen international financial cooperation, and further consolidate the foundation of fiscal management. The transformation of the regulatory bureau was achieved with substantial results and the level of fiscal governance was continuously improved.

With the strong support of Party committees and governments and other relevant departments at all levels, the finance departments doubled their efforts and took on more responsibilities to deliver good fiscal results in 2020, with fiscal operations improving quarter by quarter and budget implemented soundly, contributing greatly to economic recovery and social stability. The national general public budget revenue reached 18.29 trillion yuan in 2020, underpinning the nation's financial strength and providing a solid foundation for the sustained and sound development of the economy and society. Fiscal expenditures were maintained at a relatively high level, with national general public budget expenditures totaling 24.56 trillion yuan in 2020, providing a strong guarantee for the development of the undertakings of the Party and the country. Tax cuts and fee reductions reached unprecedented levels in 2020, resulting in more than 2.5 trillion yuan in total deductions, which invigorated the development of market entities and the real economy. Top priority was given to guaranteeing people's basic livelihoods, with the levels of basic pensions, basic medical care, and urban and rural subsistence allowances further improved and the public benefiting more from the country’s reform and development achievements in a fairer manner. The reform of the fiscal and taxation system was further advanced in depth, budget management became more science-oriented and standardized, performance review reform was fully implemented, and a modern fiscal system framework was basically established. China’s participation in global economic governance increased as well, further enhancing the country's voice and influence in international finance.

The year 2021 is of special importance for China’s modernization drive as it marks the beginning of the 14th Five-Year Plan (2021-25) and a new journey to build a modern socialist country in an all-round way. The finance departments will continue to actively play their role, holding steadfast to the major task of supply-side structural reform while focusing on demand-side management. We will accurately implement proactive fiscal policies, and strengthen fiscal and tax policy support and guidance. Unremitting efforts will be made to promote innovative development and industrial upgrading, strengthen basic livelihood protection, and support all-round rural vitalization. And more work will be done to vigorously promote green development, prevent and defuse risks in key areas, accelerate the establishment of modern fiscal and taxation systems, improve fiscal management and supervision systems, and deepen practical international cooperation in finance and the economy. The finance departments will celebrate the 100th anniversary of the founding of the CPC with outstanding achievements and work to ensure a good start to the efforts in fostering the new development paradigm.