Opinion

Achieving a positive interaction between public finance and economic development

In the first quarter, the national general public budget revenue reached RMB 6.16 trillion, a year-on-year increase of 2.4 percent, outpacing the growth rates of the same period over the past three years. Expenditure stood at RMB 7.47 trillion, a year-on-year increase of 2.6 percent, with the expenditure scale accounting for 24.9 percent of the annual budget, marking the fastest progress in the past five years. The impressive performance of fiscal revenue and expenditure reflects the effective implementation of more proactive macroeconomic policies at an earlier stage, supporting a strong start for the national economy.

On the expenditure side, the more proactive fiscal policy implemented at an earlier stage provided solid support for a sound economic start. According to the budget plan, total expenditure for this year has reached a record high, exceeding RMB 30 trillion for the first time. While the scale is significant, progress and pace are equally important. The expenditure in the first quarter, fastest progress in five years, demonstrates the proactive role of fiscal policy, delivering enhanced results and accelerating the implementation of various initiatives.

Fiscal expenditure is not only larger in scale and faster in progress but also more tangible and accessible. More funds are being directed towards investment in human capital, with healthcare expenditure growing by 12.1 percent. Measures such as child-rearing subsidies and increased subsidies for basic medical insurance funds have benefited many households. Spending on social security, employment, and government-supported housing projects has also maintained high growth rates. In the first quarter, over RMB 100 billion in ultra-long special treasury bonds were allocated to support consumer goods trade-in programs.

A key highlight of this year's macroeconomic policy is strengthening policy coordination, particularly the combined fiscal and financial policies to boost domestic demand. Tools such as loan interest subsidies, financing guarantees, and risk compensation have been employed to amplify the multiplier effect of fiscal funds, supporting the expansion of domestic demand. According to statistics, in the first quarter, the package of policies to boost domestic demand benefited 2.71 million business entities and 54.19 million consumer purchases.

Analyzing revenue and expenditure reveals that the strong economic start has provided a solid foundation for fiscal revenue. Meanwhile, the robust fiscal expenditure, combining with the more proactive fiscal policy, has delivered tangible results, promoting a steady recovery in production supply and domestic demand. This has enabled a positive interaction between fiscal revenue growth and economic development.

Policy

1. The National Health Commission and seven other departments released the implementation opinions on reforming and improving the supply and safety guarantee mechanism for children's drugs on May 7. This document aims to comprehensively enhance the capacity for pediatric drug supply and usage, from research and development to clinical application, and from production supply to payment guarantees, ensuring safer and more reliable access to children's drugs.

2. The Ministry of Industry and Information Technology, along with four other departments, recently issued the action plan for cultivating outstanding brands in the textile and apparel industry (2026–2028). The plan proposes to cultivate no fewer than 25 outstanding brands in the textile and apparel industry by 2028.

Data

1. China's smart consumer device manufacturing sector maintained a positive development trend in the first quarter of the year, according to the Ministry of Industry and Information Technology. The country produced 298 million smartphones in the first quarter, up 6.9 percent year on year, while output of service robots exceeded 4.4 million units, an increase of 2.6 percent year on year.

2. China's gold consumption saw a 4.41 percent year-on-year increase in the first quarter of 2026, totaling 303.29 metric tons, data from the China Gold Association showed.

3. China's shipbuilding sector posted strong growth across its three major indicators - shipbuilding output, new orders, and holding orders - in the first quarter of 2026, maintaining a leading share of the global market, data from the Ministry of Industry and Information Technology showed on May 9.

4. The total value of China's top 500 brands surpassed USD 2.1 trillion in 2026, up 7.6 percent from the previous year, according to a report released by Brand Finance, a global brand evaluation consultancy on May 9. As Chinese brands expand in both size and sophistication, they provide a crucial lens through which to gauge the potential of the country's economy.

5. China's Ministry of Finance has allocated RMB 45.8 billion in funds to support preschool education development in 2026, marking an increase of RMB 12.56 billion, or 38 percent, from the previous year. The funding will mainly support local governments in consolidating and implementing policies that scrap childcare and education fees for preschool children, expand access to inclusive education resources, improve education quality, and strengthen financial aid systems for children from low-income families and other disadvantaged groups.

6. China's total food imports and exports reached RMB 594.86 billion in the first four months of this year, up 6.5 percent year on year, according to data from the General Administration of Customs. Of this, China's food trade with other APEC economies totaled RMB 350.38 billion, accounting for 58.9 percent of the country's total food imports and exports.

7. China's grain purchases from the 2025 autumn harvest reached a relatively high level in recent years, marked by brisk trading activity and rising prices, according to the National Food and Strategic Reserves Administration. As of the end of April, when peak-season procurement concluded, various market entities nationwide had purchased more than 338 million metric tons of autumn grain.

8. China's railway construction made steady progress in the first four months of 2026, with fixed-asset investment in the railway sector reaching RMB 200.8 billion, up 3.2 percent year on year, according to data from China State Railway Group Co., Ltd. Development in the sector has effectively spurred spillover effects that infuse new vitality into the region's economic and social progress.

9. The total import and export value of the nine mainland cities in the Guangdong-Hong Kong-Macao Greater Bay Area reached RMB 3.37 trillion in the first four months of this year, representing an increase of 18.4 percent year on year, according to customs statistics. Their share of the country's total foreign trade rose 0.6 percentage points from a year earlier to 20.7 percent, contributing 24.9 percent to national trade growth.

10. In the first four months of this year, the Yixin'ou - also known as the Yiwu-Xinjiang-Europe freight trains -exported 58,000 TEUs of goods, up 21.1 percent year on year, with high-value-added products such as all-terrain vehicles and machine tools becoming popular cargo items. To date, the Yixin'ou China-Europe freight train service operates 27 routes, covering more than 160 cities in over 50 countries across Eurasia.

(Source: Economic Daily)