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E-mail China.org.cn, January 29, 2024
Yicai:
Taxation is a barometer of the economy. What highlights in the nation's high-quality economic development can be seen from the 2023 tax data? Thank you.
Huang Yun:
Thank you for your question. We firmly adhere to the thinking that high-quality development is of paramount importance in the new era. The State Taxation Administration (STA) has utilized tax data to build a statistical indicator system on high-quality development. The relevant analysis shows that in 2023, under the strong leadership of the CPC Central Committee with Comrade Xi Jinping at its core, the country made new progress in promoting high-quality development. I would like to share with you 10 sets of figures:
First, enterprises continued to increase their investment in innovation, and enjoyed a 13.6% increase year on year in the amount of extra tax deductions for R&D expenses. Corporate income tax prepayment declaration data shows that in the first three quarters of 2023, businesses across the country applied for extra tax deductions for R&D expenses totaling 1.85 trillion yuan. Corporate taxpayers from the manufacturing sector benefited the most, claiming 58.9% of the total. The figure for the full year will be bigger, however it is still being calculated.
Second, innovative industries grew at a faster pace, and the revenue of high-tech industries increased by 9.8% year on year in 2023. Value-added tax (VAT) invoice data shows that in 2023, the revenue of high-tech industries maintained rapid growth, with its proportion of the total revenue of Chinese enterprises rising by 0.5 percentage point from 2022. This momentum has been picking up, reflecting the remarkable output value of innovation-driven industries in recent years.
Third, innovations and breakthroughs were seen in the high-end manufacturing sector, and equipment manufacturing rose to 44.8% of the aggregate revenue of the manufacturing industry. VAT invoice data shows that in 2023, revenue from equipment manufacturing rose by 6.4% year on year, 2.9 percentage points higher than the average growth rate of manufacturing, and its ratio in overall revenue of manufacturing rose by 1.2 percentage points compared to 2022. Sales related to the "new three" products — electric passenger vehicles, lithium-ion batteries and solar cells — jumped 22.4% year on year.
Fourth, the digital economy's integration with the real economy is speeding up, with 12.1% of total sales revenue of the digital economy coming from its core industries. VAT invoice data shows that in 2023, the digital economy's core industries posted an 8.7% revenue increase, up 2.1 percentage points from 2022, while Chinese enterprises' digital procurement spending jumped by 10.1% year on year, an increase of 3.2 percentage points from 2022. The trends indicate that the integration of the digital and real economies has been spurring digital industrialization and industrial digitization.
Fifth, we have accelerated the building of a national unified market. The inter-provincial trade volume now accounts for 42.7% of the national total. Value-added tax invoice data shows that inter-provincial trade volume, an indicator of trade ties among provinces, grew by 5.9%. It also increased by 0.5 percentage point in its share of the national total trade volume compared to 2022. This represents continuous improvement year on year and a smoother domestic economic cycle.
Sixth, three major areas with impetus for growth have played a more important role in driving economic growth, with their sales revenue accounting for 54.1% of the national total. According to value-added tax invoice data, in 2023, the economies of the Beijing-Tianjin-Hebei region, the Yangtze River Delta, and the Pearl River Delta developed rapidly in general. Their combined sales revenue was up by 5.4% year on year, taking 0.3 percentage point more as a share of China's total revenue than in 2022.
Seventh, we have advanced the green transformation of industries, with the share of energy-intensive manufacturers in the manufacturing sector dropping to 30.7%. Value-added tax invoice data shows that in 2023, industrial enterprises increased their green investment at a faster pace, with a year-on-year increase of 17.7% in the purchase of environmental governance services. Additionally, the proportion of manufacturers with high energy consumption in the manufacturing sector fell by 1.5 percentage points from 2022.
Eighth, reinvestment of profit by foreign-invested enterprises has achieved steady growth, with the amount of reinvestment enjoying tax deferral reaching 141.2 billion yuan. Corporate income tax data shows that in 2023, reinvestment of profits of overseas investors increased by 0.8% year on year. Since the implementation of the preferential policy in 2018, which temporarily exempts profits obtained by overseas investors from withholding income tax, these investors have enjoyed a total of 660.3 billion yuan in reinvestments with deferred tax.
Ninth, efforts to unleash consumption potential have been successful, with both goods and services consumption growing at around 10%. According to value-added tax invoice data, in 2023, sales revenue from the consumption of goods and services increased by 11.4% and 9% year on year, respectively. Specifically, retail sales of clothing and cosmetics grew by 18.3% and 14.5% year on year, respectively. The theme park, accommodation, and restaurant sectors reported robust growth, increasing by 69.5%, 26.3%, and 19.6%, respectively.
Tenth, we have further improved social security benefits, with insurance premium income exceeding 8 trillion yuan. Data from the tax authorities shows that China's insurance premium income totaled 8.2 trillion yuan in 2023, with more than 1.3 billion people receiving payment services. This has significantly helped China build the world's largest social security system with distinct Chinese characteristics. Thank you!
