China Financial and Economic News:

The resolution said that China will improve institutions and mechanisms for fostering new quality productive forces in line with local conditions, as well as the systems for promoting full integration between the real economy and the digital economy. Looking ahead, what kinds of proactive fiscal policies will be implemented to create new growth drivers and strengths? Thank you.

Wang Dongwei:

Thank you for your question. This is an important issue, and it's also a complex one. Our overall consideration is to effectively implement a series of fiscal and tax policies that support scientific and technological innovation, ultimately driving industrial upgrades. Let me briefly introduce five aspects of this approach:

First, we will focus on strengthening the foundation and targeting key areas to support and enhance technological innovation capabilities. We will continue to prioritize science and technology as a key area of fiscal expenditure. The central government earmarked 370.8 billion yuan toward science and technology expenditure in this year's budget, marking a 10% year-on-year increase. We will substantially support the integrated development of scientific and technological innovation and industrial innovation. We will continuously scale up investment in basic, applied and frontier research while refining the investment mechanism for basic research, which features a combination of competitive funding and stable support. Several major national sci-tech innovation projects will be launched. We will also strive to secure breakthroughs in core technologies within key fields, promote the integrated and clustered development of strategic emerging industries, and accelerate the cultivation and growth of future-oriented industries. 

Second, we will focus on expanding channels and boosting empowerment to promote the deep integration of the real and digital economies. A series of policies and measures have been introduced to support this integration. Here, I would like to introduce two pilot programs. First, we launched a three-year pilot program for the digital transformation of small- and medium-sized enterprises in 2023. This program will be rolled out in 90 cities in three phases. Currently, 66 cities have already begun implementing the pilot. The second program is to allocate 18 billion yuan, which will also be distributed in three batches, to support 60 cities in conducting pilot programs for new technological transformations in the manufacturing sector.

Third, we will focus on removing obstacles and boosting consumption to propel high-quality development in the service industry. Several pro-growth measures have been introduced to support a new round of large-scale equipment upgrades and consumer goods trade-ins. Ultra-long special treasury bonds have been issued recently, worth approximately 300 billion yuan. We will fully implement the decisions and deployments of the CPC Central Committee, enhance local governments' capabilities in promoting consumption, and foster new modes and new forms of consumer spending. In addition, we will improve the commercial circulation network layout and launch pilot programs for building modern commercial circulation systems. We will launch special funds dedicated to the disposal of waste electrical and electronic products, with a budget of 7.5 billion yuan this year, to promote recycling. We will allocate over 11 billion yuan to support demonstration projects in key overseas-oriented industries, such as electronic information, construction machinery, and medicine, improving the quality and efficiency of foreign trade.

Fourth, we will focus on strengthening weak links and improving efficiency to reinforce the development of modern infrastructure. We will comprehensively use policies such as additional issuance of treasury bonds, special local government bonds, vehicle purchase tax funds, and central government budget for investment, improving the quality and efficiency of infrastructure efforts. Since 2022, approximately 18 billion yuan has been allocated to support and reinforce national comprehensive freight hubs in 25 cities, and such work will continue this year. We will support the digital transformation of major expressways, improving their carrying capacity, traffic efficiency, and safety levels. Simultaneously, we will help about 200 counties nationwide boost development of rural charging and battery-swapping facilities, addressing the shortfall in infrastructure. This initiative will increase the consumption of new energy vehicles in rural areas.

Fifth, we will focus on tackling difficulties and removing choke points, so as to enhance the resilience and security of industrial and supply chains. We will support efforts to resolve bottleneck issues in industrial and supply chains by implementing a combination of policies. We will also provide support to boost key industrial chains such as integrated circuits, industrial machine tools, medical equipment, instruments, industrial software as well as basic software, and to build industrial and supply chains that are self-supporting and risk-controllable.

That's all for my answer. Thank you.