Event:
From January to February 2022, the national general public budget revenue was 4620.3 billion yuan, a year-on-year increase of 10.5%; The general public budget expenditure was 3822.7 billion yuan, a year-on-year increase of 7.0%. From January to February, the national government fund budget revenue was 915.9 billion yuan, a year-on-year decrease of 27.2%; The budget expenditure of national government funds was 1404.2 billion yuan, a year-on-year increase of 27.9%.
Core summary:
The individual income tax and China's value-added tax promoted the improvement of public revenue in the first two months of this year. In terms of tax distribution: 1) driven by the high price of bulk commodities, the year-on-year growth rate of resource tax is the highest. 2) The year-end bonus promotes the high increase of individual income tax, which may be difficult to sustain in the future. 3) The sharp increase in China's consumption tax may be due to the higher than expected total retail sales of social consumer goods from January to February this year, driven by physical consumption during the Spring Festival. 4) The growth rate of China's value-added tax has rebounded significantly, and the rise of commodity prices has made a great contribution. China's value-added tax and individual income tax contributed 57.2% of the year-on-year tax increment. 5) The growth rate of enterprise income tax fell slightly. 6) The growth rate of land and real estate related taxes slowed down. Among them, the deed tax decreased by 25.8% year-on-year, which is consistent with the downturn trend of real estate transactions.
Public expenditure accelerated, including infrastructure related expenditure, but the sustainability remains to be seen. Among the central and local governments, local finance is more active, which is consistent with the trend that the central government is tight and local governments are the main focus of steady growth. From January to February this year, the expenditure related to public financial infrastructure increased by 8.4% year-on-year, which may be related to the commencement date of this year's major projects as a whole earlier than last year. Due to the lack of satisfactory projects in infrastructure construction, it is still difficult to solve the problem. The dislocation of commencement time leads to the high year-on-year investment of public finance in infrastructure construction at the beginning of the year, which may be unsustainable. From the perspective of the monthly public financial expenditure structure, the proportion of investment in infrastructure from January to February this year was 21.0%, the lowest level since May 2021, which shows that infrastructure may not be the focus of public finance this year.
Land transfer fees decreased sharply, and government fund expenditure accelerated under the support of special bonds. Affected by the cooling of the land market since the third quarter of 2021, the revenue of government funds decreased by 27.2% year-on-year from January to February this year. At present, the willingness of developers to acquire land is still insufficient, and the growth rate of government fund income will continue to be low. Nevertheless, with the support of special bond funds and the profits handed over by specific state-owned financial institutions and franchised institutions, the national government fund budget expenditure in 2022 increased by 22.3% year-on-year, and the government fund expenditure is expected to maintain a relatively high level during the year.
Steady Fiscal growth needs to be more active. The GDP growth target in 2022 is set relatively high, which requires the concerted efforts of macro policies. Fiscal policy plays a pillar role in it. This is also the main reason why the main indicators at both ends of fiscal expenditure and income are more positive than market expectations this year. Although the economic data from January to February exceeded expectations and the fiscal policy has been put into force, the constraints of triple pressure are still in place. It is necessary to increase the scale of active fiscal policy as soon as possible, whether it is to support the bottom economy, or to ensure market players and stable employment.
