In the first half of this year, local governments' general public budget revenue reached 6.88 trillion yuan, a year-on-year increase of 2.7%, with the growth rate accelerating by 0.6 percentage points compared to the first quarter. Revenue grew across the eastern, central, western, and northeastern regions, and 28 out of 31 provinces reported revenue increases. How should we interpret the fiscal performance of various regions in the first half of the year? Recently, all 31 provinces, autonomous regions, and municipalities have released their fiscal reports for the period.

Overall, local fiscal operations were stable in the first half of the year, with general public budget revenue hitting 6.88 trillion yuan, up 2.7% year-on-year. Among the 31 provinces, 28 posted revenue growth, three more than in the first quarter. By region, revenue increased across the eastern, central, western, and northeastern areas. In terms of total volume, major economic provinces such as Guangdong, Jiangsu, and Zhejiang maintained the top three positions in general public budget revenue. Guangdong's local general public budget revenue stood at 742.1 billion yuan, up 2.8% year-on-year; Jiangsu and Zhejiang each exceeded 500 billion yuan in the first half. For Jiangsu, revenue was stable with a slight rise, and the tax revenue share remained high. The province's general public budget revenue was 594.1 billion yuan, including 454.5 billion yuan in tax revenue, up 3.4%, with a tax share of 76.5%, indicating an improving revenue structure. By major tax types, VAT revenue grew by 5.8%, corporate income tax by 2.5%, reflecting enhanced economic vitality among business entities. Personal income tax revenue surged 17.4%, signaling sustained growth in residents' income and employment. In terms of growth rates, Tibet, Xinjiang, and Gansu led the country with general public budget revenue increases of 36.9%, 10%, and 8.2%, respectively.

From the budget execution reports of multiple provinces, strict budget enforcement and strengthening basic livelihood protections at the grassroots level were key focuses. In the first half of the year, Anhui's fiscal authorities conducted a comprehensive review of budget plans for 120 regions to ensure adequate funding for basic needs, with monitoring showing that 52.5% of the budget for grassroots operations was spent, maintaining overall stability. Liaoning's provincial legislature recommended optimizing the fiscal expenditure structure, enhancing support for major projects, key initiatives, and basic livelihoods to drive high-quality economic development and improve public welfare.

Various fiscal policies have been implemented smoothly this year, playing a positive role in supporting national strategic tasks, improving people's livelihoods, and ensuring stable local fiscal operations. On the expenditure side, local general public budget spending in the first half totaled 12.2111 trillion yuan, up 0.6% year-on-year. Guangdong, Sichuan, and Jiangsu were among the top spenders, with provinces maintaining robust spending on key areas like livelihoods. In Guangdong, livelihood spending accounted for about three-quarters of general public budget expenditure; in Jiangsu and Zhejiang, social security and employment spending grew by over 7%; in Shandong, healthcare spending rose by 14.6%. Livelihood expenditures remain a central component of local fiscal operations.

Local fiscal capacity is stronger. The central government allocated 10.42 trillion yuan in transfer payments to local governments this year, maintaining the scale above 10 trillion yuan for four consecutive years. It also disbursed 2.83 trillion yuan in equalization transfer payments, a 3.7% increase from the previous year. Additionally, the Ministry of Finance reduced some specific transfer payments to boost fiscal capacity transfers, selected provinces for pilot programs to integrate and optimize transfer payment usage, thereby enhancing local fiscal autonomy and coordination. In areas like childcare subsidies and free preschool education, the central government temporarily raised its cost-sharing ratio to alleviate local fiscal pressures and support stable operations.

Responding to the claim that "in the first quarter, all provinces had a fiscal self-sufficiency rate below 100%, with none achieving fiscal self-balance," Tang Zaifu, Deputy Director of the Budget Department of the Ministry of Finance, explained that the fiscal self-sufficiency rate is the ratio of a region's general public budget revenue to its general public budget expenditure. Under China's budget system, local general public budget expenditure is funded not only by local revenue but also by central transfer payments, funds transferred from government-managed funds and state capital operation budgets, and the use of previous year's surpluses. "Since local general public budget revenue is only one source of expenditure, a self-sufficiency rate below 100% is normal. Despite this, increased central transfer payments ensure that local governments can achieve fiscal balance," Tang said.

The issuance and use of local special bonds have accelerated. Utilizing local special bond funds is a key part of implementing a more proactive fiscal policy. This year, the national quota for new local government debt was set at 5.2 trillion yuan, including 4.4 trillion yuan for new special bonds, supporting major projects, replacing hidden debt, and clearing overdue government payments. In the first half, the focus was on implementing new special bond management mechanisms and strengthening issuance and use management, with the policy effects of special bonds continuing to unfold. A batch of major projects commenced, hidden debt was systematically replaced, and the issuance progress reached 47%.

By investment direction, funds were mainly used for municipal and industrial park infrastructure, transportation, urban renewal, and social services. Over 170 billion yuan was allocated for project capital, leveraging the government's investment to attract more private capital. In management, fiscal authorities strengthened cross-disciplinary oversight of special bond funds, conducted thorough checks on fund usage, and enhanced asset management for special bond projects by establishing asset ledgers, creating a closed loop from capital management to asset management and from debt to asset management. This year, Hebei, Jiangxi, Hubei, and Chongqing were included in the pilot program for "self-review and self-issuance" of new local special bonds. These regions have developed pilot work plans, clarified responsibilities for project selection, fund use, supervision, and debt repayment, and focused on enhancing departmental coordination and project reserve quality, leading to faster issuance and use.

Zhao Zeyong, Deputy Director of the Debt Management Department of the Ministry of Finance, stated that the ministry will guide and supervise local governments to further strengthen the closed-loop management of special bonds, including borrowing, using, managing, and repaying. This involves improving departmental coordination and review during project planning, better aligning fund use with project construction, accelerating fund disbursement to generate tangible work progress, strictly adhering to the "negative list" management, standardizing project asset management, enhancing post-investment management, and establishing a debt service reserve fund system, planning for principal and interest repayments, and collecting project operating revenues to improve debt repayment capacity.