Better Leveraging Fiscal Policy to Boost Consumption

Consumption is the ultimate purpose of economic activity and a key engine of economic growth. Expanding domestic demand is not only a major strategic deployment for accelerating the formation of a new pattern of development and promoting high-quality development, but also an inevitable requirement for meeting the people's ever-growing needs for a better life. Since the 18th National Congress of the CPC, the income level of Chinese residents has continuously improved, the consumption field has continuously expanded, and the consumption structure has been continuously optimized and upgraded. Standing at a new historical starting point, the report of the 20th National Congress of the CPC proposed "striving to expand domestic demand, strengthening the fundamental role of consumption in economic development and the key role of investment in optimizing the supply structure." The Third Plenary Session of the 20th Central Committee of the CPC emphasized "improving the long-term mechanism for expanding consumption, reducing restrictive measures, and reasonably increasing public consumption." Facing the complex situation of sluggish domestic consumer demand and increased uncertainty in external demand, this year's "Government Work Report" listed "vigorously boosting consumption, improving investment efficiency, and expanding domestic demand in all respects" as the top annual work task, proposing "implementing a more proactive fiscal policy," and emphasizing "channeling more financial resources 'into people,' serving people's livelihoods, supporting employment expansion, promoting income growth and burden reduction for residents, strengthening consumption incentives, and forming a virtuous cycle of economic development and improvement of people's livelihoods." Fiscal policy is the foundation and important pillar of national governance. Further leveraging the functions and roles of fiscal policy in boosting consumption is a key measure to promote sustained economic recovery and improvement.

消费是经济活动的最终目的，也是经济增长的重要引擎。扩大内需不仅是加快构建新发展格局、推动高质量发展的重大战略部署，更是满足人民日益增长的美好生活需要的必然要求。党的十八大以来，我国居民收入水平不断提高，消费领域不断拓展，消费结构持续优化升级。站在新的历史起点上，党的二十大报告提出“着力扩大内需，增强消费对经济发展的基础性作用和投资对优化供给结构的关键作用”，党的二十届三中全会强调“完善扩大消费长效机制，减少限制性措施，合理增加公共消费”。面对国内消费需求不振和外部需求不确定因素增加的复杂形势，今年的《政府工作报告》将“大力提振消费、提高投资效益，全方位扩大国内需求”列为年度工作任务之首，提出“实施更加积极的财政政策”，并强调“推动更多资金资源‘投资于人’、服务于民生，支持扩大就业、促进居民增收减负、加强消费激励，形成经济发展和民生改善的良性循环”。财政是国家治理的基础与重要支柱，进一步发挥财政在提振消费方面的功能和作用，是促进经济持续回升向好的关键举措。

Continuously and Systematically Empowering Consumption to Release Vitality

持续系统赋能消费释放活力

Since the 18th National Congress of the CPC, China has taken systematic fiscal policies as a starting point, constructing a multi-dimensional policy system to promote the upgrading of consumption quality.

党的十八大以来，我国以系统性财政政策为抓手，构建多维度政策体系，推动消费提质升级。

Improving the income distribution and social security system to consolidate the foundation for residents' consumption. The reform of the income distribution system has achieved remarkable results, with the middle-income group continuing to expand. Reforms were carried out to the individual income tax system, reducing the tax burden on low- and middle-income groups by increasing special additional deduction items and adjusting the standard deduction and tax rate brackets. With the optimization and adjustment of the national income distribution pattern, the potential for residents' consumption has been continuously released. At the same time, the integration and upgrading of the social security system have improved residents' consumption expectations. In 2014, China merged the New Rural Social Pension Insurance and the Urban Resident Social Pension Insurance for unified implementation, establishing a unified basic old-age insurance system for urban and rural residents. The number of participants in the basic old-age insurance for urban and rural residents increased from 501 million in 2014 to 545 million in 2023. Since 2016, the basic pension for retirees has been uniformly adjusted continuously. The minimum basic pension standard for urban and rural residents nationwide was raised from 70 yuan per person per month in 2014 to 123 yuan per person per month in 2024. A well-established social security system has effectively stabilized the income expectations of urban and rural residents, enhancing their consumption expectations and payment capacity, especially for low- and middle-income groups.

完善收入分配和社会保障制度，筑牢居民消费基础。收入分配制度改革成效显著，中等收入群体持续扩容。对个人所得税制进行改革，通过增加专项附加扣除项目以及调整减除费用标准和税率级距等举措，减轻中低收入群体税负。随着国民收入分配格局优化调整，居民消费潜力持续释放。同时，社保制度整合升级改善居民消费预期。我国于2014年将新农保、城居保合并实施，建立统一的城乡居民基本养老保险制度，城乡居民养老保险参保人数从2014年的5.01亿人增至2023年的5.45亿人。自2016年起连续统一调整退休人员基本养老金，全国城乡居民基础养老金最低标准从2014年的每人每月70元提升至2024年的每人每月123元。完善的社保制度有效稳定了城乡居民收入预期，增强了城乡居民特别是中低收入群体的消费预期与支付能力。

Comprehensively utilizing structural fiscal policy tools to tap the potential of bulk consumption. Through policy tools such as tax incentives and special subsidies, the burden on consumers is reduced, thereby stimulating consumption. For example, in the "Two New" areas (large-scale equipment renewal and consumer goods trade-in), ultra-long-term special government bonds were continuously arranged to promote equipment iteration and consumption upgrading. In 2024, 150 billion yuan was invested to support over 4,600 equipment renewal projects in areas such as industry, energy, transportation, and old elevators, effectively driving a 15.7% year-on-year increase in investment in equipment and tool purchases, contributing 67.6% to the growth of total investment. Another 150 billion yuan was invested to support consumer goods trade-ins in areas such as automobiles and home appliances through fiscal subsidies and consumption vouchers, precisely reducing residents' replacement costs and driving sales of related consumer goods exceeding 1.3 trillion yuan.

综合运用结构性财政政策工具，挖掘大宗消费潜力。通过税收优惠和专项补贴等政策工具，减轻消费者负担，从而刺激消费。例如，在“两新”（大规模设备更新和消费品以旧换新）领域连续安排超长期特别国债资金推动设备迭代和消费升级。2024年投入1500亿元支持工业、用能、交通运输、老旧电梯等领域设备更新项目超4600个，有效带动设备工器具购置投资同比增长15.7%，对全部投资增长贡献率达67.6%；投入1500亿元，通过财政补贴、消费券等方式支持汽车、家电等领域消费品以旧换新，精准降低居民换新成本，拉动相关消费品销售额超1.3万亿元。

Coordinating efforts on both the supply and demand sides to cultivate new growth points for service consumption. China has successively introduced a series of fiscal policy measures to promote service consumption, advancing the expansion and quality improvement of service consumption. Tax incentives were used to expand the supply of service consumption. Since 2019, the additional VAT deduction for life services industries was increased from 10% to 15%. VAT was exempted on income from providing community elderly care, childcare, and housekeeping services, and 90% of such income was included in taxable income. Fiscal subsidies were used to focus on improving service quality. Financial support was provided in key areas of service consumption, such as subsidies per bed for the construction of elderly care service facilities and subsidies for housekeeping service enterprises to conduct vocational skills training, fully tapping the potential of basic consumption. On the demand side, cultural tourism consumption vouchers were issued to stimulate the vitality of improvement-oriented consumption. According to data from the National Bureau of Statistics, the proportion of per capita service consumption expenditure in total per capita consumption expenditure of Chinese residents increased from 39.7% in 2013 to 46.1% in 2024, making service consumption an important driving force supporting overall consumption growth.

供需两侧协同发力，培育服务消费新增长点。我国陆续出台一系列促进服务消费的财政政策措施，推进服务消费扩容提质。通过税收优惠政策扩大服务消费供给。2019年起生活性服务业增值税加计抵减由10%提高到15%，对提供社区养老、托育、家政相关服务的收入免征增值税，并减按90%计入应纳税所得额。通过财政补贴着力提升服务品质。在服务消费关键领域提供资金扶持，对养老服务设施建设按床位给予补贴、对家政服务企业开展职业技能培训给予补贴，充分挖掘基础型消费潜力，并从需求侧发力发放文旅消费券，激发改善型消费活力。据国家统计局数据，我国居民人均服务性消费支出占人均消费支出的比重从2013年的39.7%提升至2024年的46.1%，服务消费成为支撑总体消费增长的重要动力。

Leveraging the leveraging role of fiscal funds to activate new drivers of green consumption. Innovating and improving fiscal support policies, and perfecting the incentive mechanism for green consumption. Improving the green tax system, promoting green consumption through differentiated tax system design. Since 2018, China has implemented the Environmental Protection Tax Law, which not only forces enterprises to proactively add and technologically upgrade environmental protection facilities, increasing the supply of green products, but also guides consumers to purchase low-energy, low-pollution consumer goods by improving the consumption tax system. In addition, for products included in the catalog of energy-saving, water-saving, and environmental protection special equipment eligible for corporate income tax incentives, 10% of the investment amount in such special equipment is allowed to be credited against the current year's corporate income tax payable, guiding enterprises towards green consumption. Government procurement leads the trend of green consumption. In 2019, multiple departments jointly issued the "Notice on Adjusting and Optimizing the Implementation Mechanism for Government Procurement of Energy-Saving and Environmental Labeling Products," implementing item list management for government procurement of energy-saving and environmental labeling products, and implementing government priority procurement and mandatory procurement based on the item list and certification certificates. In 2023, China prioritized procurement of environmental protection products worth 57.51 billion yuan, accounting for 84.9% of the total procurement scale for similar products. Furthermore, continuous efforts were made in the field of new energy vehicles, specifying that the proportion of new energy vehicles in newly added and replaced official vehicles should not be less than 30%, helping to cultivate new growth points for green consumption.

发挥财政资金的杠杆作用，激活绿色消费新动能。创新和完善财政支持政策，健全绿色消费激励机制。完善绿色税收制度，通过差异化税制设计推动绿色消费。2018年起，我国施行环境保护税法，既倒逼企业主动对环保设施进行增设和技术改造，加大绿色产品供给，又通过完善消费税制度，引导消费者购买低能耗、低污染消费品。此外，还对列入节能节水和环境保护专用设备企业所得税优惠目录的产品允许按专用设备投资额的10%抵免当年企业所得税应纳税额，引导企业绿色消费。政府采购引领绿色消费风向。2019年，多部门联合发布《关于调整优化节能产品、环境标志产品政府采购执行机制的通知》，对政府采购节能产品、环境标志产品实施品目清单管理，并依据品目清单和认证证书实施政府优先采购和强制采购。2023年，我国优先采购环保产品575.1亿元，占同类产品采购规模的84.9%。此外，在新能源汽车领域持续发力，明确公务用车新增及更新车辆中新能源汽车占比不低于30%等，助力培育绿色消费新增长点。

Coordinating Fiscal Resources for Precise Support of Consumption

统筹财政资源精准支持消费

Currently, the income level of Chinese residents has significantly improved, the scale of the consumer market continues to expand, and the level of consumption is constantly rising. However, the consumption potential has not been fully released, and overall resident consumption faces problems such as a relatively single structure and insufficient consumer confidence. In recent years, fiscal funds have continuously tilted towards key livelihood areas such as education, medical care, and social security. However, compared with the expectations of the people and the needs of social development, there are still some shortcomings and weaknesses. For example, the capacity of primary-level medical services is relatively weak, the coverage of community elderly care service facilities is insufficient, and the allocation of public service resources between urban and rural areas and regions is unbalanced. At the same time, the design of the tax system also needs improvement.

当前，我国居民收入水平显著提高，消费市场规模持续扩大，消费水平不断提升，但消费潜力尚未完全释放，整体居民消费面临结构较为单一、消费信心不足等问题。近年来，财政资金持续向教育、医疗、社会保障等重点民生领域倾斜，但与人民群众的期待和社会发展需求相比，仍存在一些短板弱项。如，基层医疗服务能力相对薄弱，社区养老服务设施覆盖不足，城乡、区域间公共服务资源配置不均衡等。同时，税收制度设计也有待完善。

Boosting consumption is key to smoothing the economic cycle. It is necessary to better leverage the supporting and guiding role of fiscal policy, focus on solving the pain points and difficulties hindering consumption promotion, further optimize the allocation of fiscal resources, coordinate efforts on both the supply and demand sides, and implement precise policies in areas such as income security, tax system optimization, service supply, and expectation management. This will strengthen consumption incentives, boost consumer confidence, and enhance residents' willingness and ability to consume.

提振消费是畅通经济循环的关键，需更好发挥财政的支持、引导作用，着力解决阻碍消费提振的痛点难点问题，进一步优化财政资源配置，从供需两端协同发力，在收入保障、税制优化、服务供给与预期管理等方面精准施策，加强消费激励、提振消费信心，提升居民消费意愿和能力。

Strengthen the orientation of fiscal expenditure and consolidate the foundation of residents’ consumption. To enhance consumption capacity, the fundamental approach lies in consolidating the income foundation, and the key lies in precise policy support at the bottom line. We should focus on key groups, optimize the structure of fiscal expenditure, strengthen guarantees and expectation guidance, and strive to break through the income bottleneck constraining the expansion of consumption. First, increase the intensity of transfer expenditure and enhance the guarantee effectiveness for key groups. Focus on low- and middle-income groups, flexible employees, etc., promote the precise allocation of fiscal resources and their direct reach to the grassroots, support local governments in establishing special arrangements such as consumption subsidies, livelihood assistance, and temporary safety-net projects, and improve a tiered and categorized transfer payment system. Increase fiscal investment in key livelihood areas such as trade-ins for new goods, child-rearing burden reduction, and housing improvement, enhance the precision and synergy of policies, and strengthen the guiding role of fiscal policy on residents’ consumption. Second, improve the supply of basic public services and alleviate the pressure of residents’ anticipatory expenditures. Promote the continuous tilt of fiscal investment towards areas such as education and childcare, primary-level healthcare, and community-based elderly care, support local governments in expanding the coverage and accessibility of inclusive public services through means such as government procurement of services and fiscal subsidies, effectively reduce the long-term expenditure burden on families, and enhance consumption confidence. Third, strengthen employment support and income orientation, and expand income-increasing channels for key groups. Focus on key populations such as college graduates and rural migrant workers, promote the implementation of projects such as work-relief programs, public welfare positions, and skills training, and expand employment capacity in grassroots and emerging fields. Encourage local governments to guide small, medium, and micro enterprises to absorb employment through means such as job subsidies, entrepreneurship support, and financing interest subsidies, thereby consolidating the income foundation for consumption growth.

强化财政支出导向，夯实居民消费基础。提升消费能力，根本在于夯实收入基础，关键在于政策精准托底。应聚焦重点群体，优化财政支出结构，强化保障与预期引导，着力打通制约消费扩大的收入瓶颈。一是加大转移性支出力度，增强重点群体保障效能。聚焦中低收入群体、灵活就业人员等，推动财政资源精准配置、直达基层，支持地方设立消费补贴、生活救助、临时性兜底项目等专项安排，完善分层分类的转移支付体系。加大对以旧换新、育儿减负、住房改善等关键民生领域的财政投入，提升政策的精准性和协同性，增强财政对居民消费的引导作用。二是完善基本公共服务供给，缓解居民预期性支出压力。推动财政投入向教育托育、基层医疗、社区养老等领域持续倾斜，支持地方通过政府购买服务、财政补助等方式，扩大普惠性公共服务的覆盖范围与可及程度，切实减轻家庭长期支出负担，增强消费信心。三是强化就业支持与收入导向，拓展重点群体增收路径。聚焦高校毕业生、农村转移劳动力等重点人群，推动以工代赈、公益性岗位、技能培训等项目落地，扩大基层和新兴领域就业容量。鼓励地方通过岗位补贴、创业扶持、融资贴息等方式，引导中小微企业吸纳就业，夯实消费增长的收入基础。

Improve the tax system structure and enhance the incentive function of taxation for consumption. Accelerate the reform of the tax system to better leverage the dual functions of tax revenue regulation and consumption guidance. First, improve the individual income tax system. Continuously optimize the special additional deduction policy, implement precise tax reduction, effectively reduce the tax burden, and steadily increase people’s disposable income and consumption capacity. Rationally increase the proportion of individual income tax borne by high-income groups, enhance the targeting of tax regulation, effectively narrow the income gap, and promote the formation of a new consumption pattern with benign interaction. Second, advance the backward shift of the collection link for excise tax and steadily delegate it to local governments. On the basis of meeting tax collection and management conditions, promote reform in a categorized and orderly manner, prioritizing categories such as high-end consumer goods with concentrated tax sources and clear circulation links, shifting the collection from the production link to the retail link, effectively guiding consumption backflow and releasing potential demand. At the same time, rationally divide the ownership of excise tax revenue, allocate part of the revenue to local governments, enhance the regulatory capacity of grassroots fiscal resources, encourage local governments to increase investment in consumption infrastructure, improve the supply of public services, and create a convenient, comfortable, accessible, and perceptible consumption environment, thereby effectively playing the important role of fiscal policy in expanding domestic demand and boosting consumption.

完善税制结构，增强税收对消费的激励功能。加快推进税收制度改革，更好发挥税收收入调节和消费引导的双重功能。一是完善个人所得税制度。持续优化专项附加扣除政策，落实精准减税，切实减轻税收负担，不断提高人们的可支配收入和消费能力。合理提升高收入群体个人所得税占比，增强税收调节的针对性，有效缩小收入差距，推动形成良性互动的消费新格局。二是推进消费税征收环节后移并稳步下划地方。在具备征管条件的基础上，分类有序推进改革，优先将高端消费品等税源集中、流通环节清晰的品类，由生产环节后移至零售环节征收，有效引导消费回流，释放潜在需求。同时，合理划分消费税收入归属，将部分收入划归地方，增强基层财力调控能力，推动各地加大消费基础设施投入，完善公共服务供给，营造便捷舒适、可及可感的消费环境，切实发挥财政政策在扩大内需、提振消费中的重要作用。

Leverage the guiding role of government investment and enhance the supply capacity of consumption services. Further adjust the direction of fiscal fund allocation and improve the targeting and effectiveness of capital investment in key area project construction. First, rationally balance the allocation structure between central budget investment and local government special bond funds in economic development and livelihood guarantees. Increase support for the construction of livelihood facilities in key areas such as education, healthcare, elderly care, and childcare, increase the supply of high-quality public services, promote coordinated regional development, and guide more resources to tilt towards central and western regions and rural areas. Second, accelerate the coordinated layout and construction of new-type consumption infrastructure. Support the construction of infrastructure such as logistics and distribution, digital networks, and smart service terminals required for emerging consumption models, promote the transformation of traditional commercial facilities into multifunctional, experience-oriented spaces, and meet the needs of consumption upgrading. Third, fully leverage the leveraging role of fiscal funds in attracting social capital. Through means such as project guidance, risk sharing, and fund matching, guide social capital to actively participate in investment in public service areas, and continuously expand the supply of high-quality services.

发挥政府投资引导作用，提升消费服务供给能力。进一步调整财政资金投放方向，提高重点领域项目建设资金投入的针对性和有效性。一是合理平衡中央预算内投资与地方政府专项债券资金在经济发展和民生保障之间的配置结构。加大对教育、医疗、养老、托育等关键领域民生设施建设的支持力度，增加优质公共服务供给，促进区域协调发展，引导更多资源向中西部地区、农村地区倾斜。二是加快新型消费基础设施的统筹布局和建设力度。支持新兴消费模式所需的物流配送、数字化网络、智慧服务终端等基础设施建设，推动传统商业设施向多功能、体验型空间转型，满足消费升级需求。三是充分发挥财政资金撬动社会资本的杠杆作用。通过项目引导、风险分担、资金配套等方式，引导社会资本积极参与公共服务领域投资，持续扩大优质服务供给。

Strengthen fiscal-financial coordination and linkage, and boost consumption confidence through expectation management. Expand diversified consumption financing channels and enhance residents’ consumption capacity and willingness. First, improve mechanisms such as fiscal interest subsidies, risk compensation, and government guarantees. Provide a certain proportion of interest subsidies for eligible consumer credit to reduce residents’ loan costs, establish risk compensation funds to share part of the risk for financial institutions, and encourage them to increase credit supply in key areas such as service consumption, green renewal, community-based elderly care, and digital life. Second, establish special credit products or policy-based financing instruments supported by fiscal funds, combining precise support with market-oriented operation, to provide low-interest, convenient financing support for specific consumption projects. Third, leverage the guiding role of fiscal funds to encourage financial institutions to develop small-scale, moderate consumer financial products targeting new urban residents and youth groups. Through supporting measures such as fiscal subsidies and risk sharing, drive financial resources to flow more precisely and efficiently to the consumption end, forming a benign mechanism of fiscal support at the bottom line, financial amplification, and market response.

强化财政金融协同联动，以预期管理提振消费信心。拓展多元化消费融资渠道，增强居民消费能力和意愿。一是健全财政贴息、风险补偿、政府担保等机制。对符合条件的消费信贷给予一定比例的利息补贴，降低居民贷款成本，建立风险补偿基金，为金融机构分担部分风险，鼓励其加大对服务消费、绿色更新、社区养老、数字生活等重点领域的信贷投放。二是设立由财政支持的专项信贷产品或政策性融资工具，精准扶持与市场化运作相结合，为特定消费项目提供低息、便捷的融资支持。三是发挥财政资金引导作用，鼓励金融机构面向新市民、青年群体开发小额、适度的消费金融产品，通过财政补贴、风险分担等配套措施，带动金融资源更精准、高效地流向消费端，形成财政托底、金融放大、市场响应的良性机制。

(Both authors are specially appointed researchers of the Beijing Research Center for Xi Jinping Thought on Socialism with Chinese Characteristics for a New Era and professors at the Central University of Finance and Economics)

（作者均系北京市习近平新时代中国特色社会主义思想研究中心特约研究员、中央财经大学教授）

Online editor: Huihui

网络编辑：慧慧