This issue provides an overview of the macro-economic trends in Q1 2021, some policy updates and hot topic analysis.
Here are some macro-economic highlights:
Total aggregate financing to the real economy increased by 10.24 trillion yuan in Q1
According to the People’s Bank of China (PBoC), total aggregate financing to the real economy (AFRE) increased by 10.24 trillion yuan in the first quarter, a reduction of 0.87 trillion yuan from the same period of 2020. As a result, total outstanding AFRE reached 294.55 trillion yuan by the end of Q1, up 12.3% year-on-year and 0.8% more than in Q1 2020.
Fiscal revenue grew by 24.2% while fiscal spending increased by 6.2%
In the first quarter, on the back of strong economic recovery, the national public budget revenue grew by 24.2% year-on-year to 5.71 trillion yuan. Average Q1 growth rate in two years of 2020 and 2021 was 3.2%. It increased by 6.4% compared to Q1 2019. Meanwhile, national public budget expenditure went up by 6.2% to 5.87 trillion yuan in Q1 this year.
In September last year, President Xi Jinping announced at the 75th United Nations General Assembly (UNGA) that China would strive to peak out its carbon dioxide emissions before 2030 and achieve carbon neutrality before 2060. Although there are great challenges and difficulties, perhaps it is the only way for the country to achieve sustainable development. Throughout the transformative process, hundreds of trillion yuan worth of investments will drive the green and low-carbon transformation in many sectors, including the energy system. All in all, achieving carbon neutrality will have a far-reaching impact on China’s medium and long-term economic development.
China Tax Leader, Central China Markets Leader, Shanghai Office Lead Partner, PwC China
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