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This issue provides an overview of the macroeconomic trends in Q2 2023, some policy updates and hot topic analysis.
Here are some macro-economic highlights:
Growth of aggregate financing to the real economy increased by 9%
According to the People's Bank of China (PBOC), in H1, market liquidity was reasonable and abundant, the credit structure showed continuous improvement, the financing cost of the real economy steadily declined, and financial support for the economy remained strong. PBOC officials emphasised that it usually takes about a year for the economy to recover from the pandemic, and China's situation has been stable for only about half a year.
Fiscal revenue increased by 13.3% while fiscal spending grew by 3.9%
According to the Ministry of Finance, in H1, national fiscal revenue increased by 13.3% YoY to 11.92 trillion yuan, primarily driven by the recovery of economic growth, and the implementation of large-scale value-added tax rebate policies in April last year which dragged down the comparison base. On the other hand, the national public budget expenditure increased by 3.9% YoY to 13.39 trillion yuan in H1.
China's economy recovered at a slower pace than anticipated in the second quarter. The current challenge lies in the general lack of confidence among residents and businesses in the extent and scope of economic recovery, translating to insufficient demand, continued weak consumption, and slow investment recovery. In this context, this section asserts that through the study and analysis of the development of China's industrial economy, it can be reasonably concluded that China's economic development remains sustainable.
China Tax Lead Partner, Central China Markets Leader, Shanghai Office Lead Partner, PwC China
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