Since the beginning of this year, a more proactive fiscal policy has been implemented, increasing expenditure intensity, accelerating expenditure progress, and strengthening investment in areas that benefit people's livelihoods, promote consumption, and increase momentum. For the second half of the year, many experts believe that the fiscal policy will accelerate the implementation of stock policies, focusing on the early issuance and use of ultra long term special treasury bond and local government special bonds. In the future, depending on the economic operation, the incremental reserve policy in the financial sector is expected to be launched in due time to expand domestic demand. Possible measures include the issuance of extra long-term special treasury bond, the establishment of new policy based financial instruments, etc. Accelerate the progress of fiscal expenditure In 2025, the scale of national general public budget expenditure will increase by 1.2 trillion yuan over the previous year, the limit of new local government special debt will increase by 500 billion yuan over the previous year, and the scale of planned issuance of ultra long term special treasury bond will increase by 300 billion yuan over the previous year... The budgetary arrangements at the beginning of this year fully reflect the expansion of fiscal policy this year. Looking back at the first half of the year, the increase in expenditure intensity and the acceleration of expenditure progress are distinct characteristics of fiscal policy implementation. From the perspective of fiscal expenditure, in the first five months, the national general public budget expenditure was 11.3 trillion yuan, an increase of 4.2%; Among them, the central government's expenditure increased by 9.4%, and local expenditure increased by 3.4%. Li Chao, Chief Economist of Zheshang Securities, analyzed that in the first five months, the expenditure progress in the three major areas of social security and employment, health and education was relatively fast, which was highly in line with the main direction of macroeconomic countercyclical regulation policies. At the same time, financial departments at all levels are making efforts to accelerate the issuance and use of government bonds. This year's ultra long term special treasury bond are mainly issued from April to October. Compared with last year's issuance from May to November, the overall issuance time is about one month ahead of schedule. In the first five months, the issued treasury bond was 6.29 trillion yuan, up 38.5% year on year; Issuing new local government bonds worth 1.98 trillion yuan, an increase of 36.6%; Issued 1.63 trillion yuan of refinancing bonds to replace existing implicit debt, achieving 81.5% of this year's 2 trillion yuan limit. A more proactive fiscal policy is not only reflected in the expansion of fiscal expenditure scale, but also further emphasizes the progress of fiscal expenditure and takes the initiative to move forward. For the same expenditure scale, the earlier the expenditure is made, the faster the actual expenditure is formed, and the better the policy effect. ”Yang Zhiyong, President of the Chinese Academy of Fiscal Sciences, stated. While expanding the scale of fiscal expenditure, the expenditure structure continues to be optimized, and investment in areas that benefit people's livelihoods, promote consumption, and increase momentum is strengthened. From the perspective of major fiscal expenditure subjects, key livelihood areas such as education, healthcare, and employment have received strong support for their expenditures. In the first five months, social security and employment expenditures amounted to 2005.4 billion yuan, an increase of 9.2%; Education expenditure was 1745.5 billion yuan, an increase of 6.7%; Health expenditure reached 889.6 billion yuan, an increase of 3.9%; The expenditure on science and technology was 360.9 billion yuan, an increase of 6.5%. Focusing on expanding domestic demand and promoting consumption, 500 billion yuan of ultra long term special treasury bond will be allocated this year to strengthen and expand the encirclement and implement the "two new" policy. According to data from the National Development and Reform Commission, in terms of equipment updates, the first batch of approximately 173 billion yuan has been allocated to about 7500 projects in 16 fields; In terms of exchanging old for new consumer goods, the first two batches of 162 billion yuan in funds have been issued as planned in January and April respectively. According to the established work arrangement, the third batch of funds for exchanging old for new consumer goods this year will be issued in July. The effects of the "two new" policies are continuously emerging, effectively unleashing the vitality of domestic demand. Yu Weining, a statistician from the Industrial Department of the National Bureau of Statistics, stated that in the first five months, driven by policies related to large-scale equipment updates, the profits of the general equipment and special equipment industries increased by 10.6% and 7.1% respectively year-on-year, totaling 0.6 percentage points of profit growth for industries above designated size; The policy of exchanging old for new consumer goods has had a significant impact on expanding the market, with profits in industries such as smart consumer device manufacturing, other household electrical appliance manufacturing, and household kitchen appliance manufacturing increasing by 101.5%, 31.2%, and 20.7%, respectively. In addition, many regions have increased their support for technological innovation, adding momentum to high-quality development. For example, Shandong Province has increased the coordination of financial resources and provided "real gold and silver" to support the innovation and development of artificial intelligence. Preliminary estimates show that the provincial finance will invest about 1 billion yuan in 2025, of which about 200 million yuan will be involved in the newly introduced incremental policies. In order to leverage more financial resources to support technological innovation, seven departments including the Ministry of Science and Technology and the Ministry of Finance have issued the "Several Policy Measures to Accelerate the Construction of a Technology Financial System to Strongly Support High level Technological Independence and Self improvement", which proposes to innovate the way finance invests in technology, make full use of existing policies such as loan interest subsidies, insurance subsidies, and risk compensation, and support enterprise technological innovation. Implement tax policies related to angel investment and venture capital, and guide social capital to invest more in technological innovation. Incremental policies can be expected to take effect in the second half of the year. Many experts believe that fiscal policies should accelerate the implementation of existing policies and plan incremental policies in a timely manner. Finance Minister Lan Fu'an recently stated that in the next step, we will make full use of more proactive fiscal policies, timely introduce incremental reserve policies according to changes in the situation, focus on stabilizing employment, enterprises, markets, and expectations, and make every effort to consolidate the fundamentals of economic development and social stability. Tao Chuan, chief economist of Minsheng Securities Research Institute, believes that the key to implementing the stock policy is to accelerate the issuance and use of government bonds. It is expected that the use of ultra long term special treasury bond will accelerate, and the new special bonds that support key areas and weak links will also be further expanded. In terms of incremental policies, Yang Yewei, Chief Macro Fixed Income Analyst at Guosheng Securities, believes that domestic demand is highly dependent on fiscal support, and coupled with external uncertainty, it is still necessary to increase fiscal support for domestic demand in the future. Incremental fiscal policies are expected in the second half of the year. Tao Chuan also stated that boosting consumption still requires fiscal support, and it is expected that fiscal funds will support livelihood areas such as childbirth, employment, and service consumption, enhancing residents' willingness to consume in the medium and long term. In addition, considering the obvious effect of the "two new" policy, it is not ruled out that the issuance of extra long term special treasury bond in the second half of the year will continue to support the "two new" policy. It is expected that in the second half of the year, the government will raise an additional 500 billion to 1 trillion yuan in incremental funds to hedge the impact of external uncertainty. The government may increase its support for consumption and investment, while also increasing its support for local governments to increase available financial resources. ”Tan Zhuo, assistant to the general manager of China Merchants Bank Research Institute, said that the way of financial strengthening might include issuing extra long term special treasury bond, establishing new policy financial instruments, etc. (New Society)