Recently, the National Taxation Administration reported that from January to August this year, the major policies supporting technology innovation and manufacturing development resulted in tax reductions, fee cuts, and refunds exceeding 1.8 trillion yuan.
Technology innovation is a core component in developing new productive forces, while manufacturing serves as the foundation of the real economy; together, they play a crucial role in achieving high-quality development. Both the central economic work conference last year and this year’s National People’s Congress emphasized that structural tax reductions and fee cuts should primarily focus on supporting technology innovation and manufacturing. In the face of economic downward pressure, these targeted policies demonstrate a precise and strategic financial approach, effectively addressing key areas in real economic development.
An analysis of value-added tax invoice data highlights the significant progress in technology innovation and manufacturing development:
– The innovation sector is experiencing continuous growth. From January to August, the sales revenue of high-tech industries and patent-intensive industries in China grew by 11.6% and 8%, respectively, compared to the same period last year.
– The manufacturing sector is proving to be a “ballast” for the economy. During the same period, the sales revenue from manufacturing accounted for 29.7% of total sales revenue, marking an increase of 0.8 percentage points year-on-year.
However, achieving technology innovation and upgrading the manufacturing sector is not a quick task; it requires a long-term commitment. The policies are not only focused on short-term precision but also on long-term vision, ensuring systematic planning and sustained efforts.
On one hand, systematic planning reduces the burdens on companies while providing momentum for their transformation and upgrades. Statistics show that from 2018 to 2023, cumulative tax reductions, fee cuts, and tax refunds exceeded 4 trillion yuan, making up over 30% of all tax benefits, with the manufacturing sector gaining the most. Furthermore, with ongoing improvements in corporate income tax systems, China is gradually forming a tax support framework that covers the entire lifecycle of enterprise growth and innovation, thereby nurturing startups and supporting the growth of established companies.
The symbiotic relationship between technology innovation and high-quality manufacturing development has grown stronger. As of now, China’s total number of manufacturing enterprises has surpassed 6 million, with approximately 515,300 firms related to strategic emerging industries, representing 8.55% of all manufacturing companies—an increase of 6.35% since the end of 2023. A series of fiscal and tax policies promoting technological research and development, as well as chain strengthening and transformation upgrades, are effectively driving the manufacturing sector towards higher-end, intelligent, and greener practices.
Value-added tax invoice data indicates that high-tech manufacturing is showing strong momentum this year, reflecting the accelerating development of new productive forces. From January to August, sales revenue in the equipment manufacturing sector grew by 5.5%, outpacing the average growth rate in manufacturing by 0.9 percentage points. The share of sales revenue from high-end equipment manufacturing and high-tech manufacturing within the manufacturing sector increased to 16.5% and 15.6%, up by 0.5 and 0.6 percentage points, respectively, compared to the previous year.
On the other hand, continuous efforts are being made to expand the scope of policies, enhance their impact, and increase the “value” of these policy incentives. For example, the policy allowing additional deductions for R&D expenses has provided significant benefits for tech innovation companies, with the deduction rates continuously rising and the enjoyment timeline for policies regularly advancing. Data from the first half of this year’s corporate income tax assessments revealed that 629,000 companies benefited from R&D expense deductions amounting to 3.45 trillion yuan.
Moreover, fiscal and tax policies are being aligned with monetary and industrial policies to collaboratively promote the optimization and upgrading of economic structures. To encourage increased investment in technology innovation, the Ministry of Finance and the Ministry of Industry and Information Technology launched a new round of financial subsidies for small and medium-sized enterprises focused on specialty and innovation. Additionally, to drive large-scale equipment updates in the industrial sector, the central government has allocated approximately 300 billion yuan for super long-term special treasury bond funds to support interest subsidies on equipment update loans. Policies are also being systematically employed across key industrial chains like integrated circuits and industrial manufacturing, enhancing tax incentives and various support measures… These policy incentives are consistently being amplified, releasing ongoing effects that stimulate technology innovation and manufacturing development.
Currently, China is accelerating the promotion of new industrialization, cultivating advanced manufacturing clusters, and facilitating the concentration of various advanced production factors toward the development of new productive forces. The fiscal and tax policies will continue to align with the trends in technology innovation and manufacturing development, striking a balance between policy tools and intrinsic relationships with high-quality growth. This will undoubtedly bolster the transformation and upgrading of enterprises, allowing China’s economic momentum to thrive.
