Ten sets of tax data help you read the economic situation in the first quarter correctly.

Since the beginning of this year, under the strong leadership of the CPC Central Committee with the Supreme Leader as the core, the economic operation in the first quarter of the 14th Five-Year Plan has started well, showing the resilience and vitality of China’s economy. On April 23rd, State Taxation Administration of The People’s Republic of China released ten sets of tax data, which reflected that China’s economic operation in the first quarter showed a good trend of stability and consolidation.

According to the relevant person in charge of State Taxation Administration of The People’s Republic of China, there are two main reasons for the high growth rate of various indicators in the first quarter:On the one hand,In the first quarter of this year, the effectiveness of China’s overall epidemic prevention and control and economic and social development continued to show, a series of policy effects were continuously released, and the domestic and international market demand picked up. In addition, during the Spring Festival this year, many places advocated celebrating the New Year on the spot, and the employees’ arrival at their posts was significantly better than in previous years, which effectively promoted the accelerated production of enterprises and improved efficiency;On the other hand,In the first quarter of last year, affected by the epidemic, the base of various indicators was low, which brought about a higher increase in various indicators in the first quarter of this year. Therefore, to correctly read the economic situation in China in the first quarter, we should not only look at the year-on-year growth under the background of the epidemic in the first quarter of last year, but also look at the growth compared with the same period without the epidemic in the first quarter of 2019. On this basis, calculating the two-year average growth rate can reflect the economic operation situation more objectively and comprehensively.

First, the sales revenue of enterprises nationwide increased by an average of 12.8% in two years, and the production and operation of enterprises improved steadily.

General Secretary of the Supreme Leader stressed that it is necessary to promote enterprises to play a greater role in achieving greater development and to accumulate basic strength for economic development. The tax authorities have conscientiously implemented the arrangements of the CPC Central Committee and the State Council, implemented preferential policies for reducing taxes and fees through the implementation mechanism of the "one pole at a time" policy, vigorously promoted high-quality and efficient intelligent tax and fee services, and helped enterprises "travel light".

According to the data of VAT invoice, in the first quarter of 2021, the sales revenue of national enterprises increased by 50.5% year-on-year, 27.2% compared with the same period in 2019, and the average growth rate in two years was 12.8%, which continued the steady and good growth trend since the second half of last year.

Two, the national manufacturing sales revenue increased by 9.6% on average for two years, and the industry maintained a stable recovery trend.

Manufacturing is an important foundation of the real economy. General Secretary of the Supreme Leader has repeatedly emphasized the important role of manufacturing industry and clearly pointed out that efforts should be made to build a modern industrial system supported by advanced manufacturing industry. In the 2021 Government Work Report, Premier Li Keqiang proposed that the focus of economic development should be on the real economy and the proportion of manufacturing industry should be basically stable. Since the beginning of this year, a series of preferential tax and fee policies to support the development of manufacturing industry have been effective, which has effectively promoted the development of manufacturing industry.

According to the data of VAT invoice, in the first quarter of 2021, the national manufacturing sales revenue increased by 49.7% year-on-year, by 20.2% compared with the same period in 2019, and by 9.6% on average in two years. Among them, the equipment manufacturing industry increased by 59.7% year-on-year, with an average growth rate of 10.8% in two years, which was faster than the average level of manufacturing industry.

The rapid development of manufacturing industry has effectively stimulated the accelerated recovery of industry. According to the VAT invoice data, in the first quarter of 2021, the sales revenue of industrial enterprises nationwide increased by 46.7% year-on-year, 19.6% over the same period of 2019, and the average growth rate was 9.3% in two years. Among the 41 major industries, the average growth rate of 38 industries increased in two years, and the average growth rate of 18 industries exceeded 10% in two years.

Third, the sales revenue of high-tech industries increased by an average of 19% in two years, and innovation and development were accelerated.

The outline of the "14th Five-Year Plan" proposes to persist in innovation-driven development and comprehensively shape new development advantages. In the 2021 Government Work Report, Premier Li Keqiang emphasized that innovation should be the core of China’s overall modernization, and self-reliance through science and technology should be the strategic support for national development. In recent years, the proportion of R&D expenses plus deduction has been increasing, and various tax policies supporting scientific and technological innovation have been effectively implemented, which has promoted the continuous enhancement of enterprises’ scientific and technological innovation ability.

According to the data of VAT invoice, in the first quarter of 2021, the sales revenue of China’s high-tech industries increased by 53% year-on-year, 41.6% over the same period of 2019, and the average growth rate in two years was 19%, which was faster than the national average. The investment in science and technology of enterprises continued to increase, and the amount of purchasing scientific research equipment such as photoelectric instruments increased by 62.3% year-on-year, with an average increase of 17.1% in two years. The transformation of scientific and technological innovation achievements was accelerated, and the sales revenue of professional technical services, R&D and design services and transformation services of scientific and technological achievements increased rapidly, increasing by 60.1%, 63.1% and 102.5% respectively, with an average increase of 19%, 22.3% and 46.4% respectively in two years.

Four, the country’s newly established tax-related market entities grew by an average of 16.1% in two years, effectively stimulating market vitality.

Market subject is the carrier of economic strength, and protecting market subject means protecting social productive forces. In recent years, as a key measure to stimulate the vitality of market players and develop endogenous power, a series of policy dividends such as tax reduction and fee reduction and the "streamline administration, delegate power, strengthen regulation and improve services" reform have been released continuously, and the number of newly established tax-related market players has been increasing.

According to State Taxation Administration of The People’s Republic of China data, in the first quarter of 2021, there were 2.792 million new tax-related market entities in China, up 86% year-on-year, up 34.9% compared with the same period in 2019, with an average growth of 16.1% in two years. Among them, in the first quarter of 2021, the number of new individual industrial and commercial households increased by 101% year-on-year, up by 36% over the same period of 2019, with an average growth of 16.6% in two years.

As an important force to promote economic and social development, the number of newly established tax-related market entities in the private economy is 2.758 million, accounting for 98.8% of the total number of households, an increase of 0.3 percentage points over the same period of last year. Driven by a series of policies to help enterprises out of difficulties, the sales revenue of private economy increased by 54.5% year-on-year, with an average increase of 14.7% in two years.

Five, the enterprise investment in environmental protection equipment has increased by more than 10% on average in two years, and the green industry has sufficient development potential.

The General Secretary of the Supreme Leader stressed that it is necessary to deepen reform around promoting comprehensive green transformation, establish and improve the economic system of green and low-carbon circular development, and push China’s green development to a new level. The outline of the 14th Five-Year Plan proposes to promote green development and harmonious coexistence between man and nature. The tax authorities firmly establish the development concept of "Lucid waters and lush mountains are invaluable assets", give full play to the role of tax leverage, encourage enterprises to increase investment in environmental protection, and actively transform to green and low carbon.

According to the VAT invoice data, in the first quarter of 2021, the eco-environmental protection related industries accelerated, and the sales revenue of the eco-protection industry increased by 83.4% year-on-year, 53.6% over the same period of 2019, with an average growth of 23.9% in two years. The investment in environmental protection equipment increased, and the procurement of pollution prevention equipment and environmental monitoring instruments by enterprises increased by 63.5% and 54.9% respectively, with an average increase of 12.7% and 11.7% respectively in two years.

Six, the national retail sales revenue increased by an average of 13.4% in two years, and the consumer market continued to recover.

The Fifth Plenary Session of the 19th CPC Central Committee put forward the strategic basic point of expanding domestic demand. In the 2021 Government Work Report, Premier Li Keqiang called for the establishment of an effective system to expand domestic demand, promote consumption in an all-round way, and accelerate the cultivation of a complete domestic demand system. From the central government to the local government, the implementation of a series of preferential tax policies to promote residents’ consumption and expand domestic demand has effectively boosted residents’ consumption confidence.

According to the VAT invoice data, in the first quarter of 2021, the national retail sales revenue increased by 52.9% year-on-year, by 28.7% compared with the same period in 2019, and by an average of 13.4% in two years. Among them, the retail income of food and beverage, textile and clothing increased by 62% and 54.2% respectively, with an average increase of 28% and 16.7% respectively in two years. At the same time, some upgraded consumption increased significantly, and the sales revenue of jewelry, watches and clocks, health care and medical equipment increased by 75.4%, 88.6% and 73.2% respectively.

Since the outbreak, online education, Internet diagnosis and treatment, telecommuting and other new formats and new modes have become new kinetic energy to activate consumption potential. In the first quarter of 2021, the sales revenue of digital cultural services and residential Internet services increased by 60.3% and 65.4% respectively year-on-year, and continued to maintain rapid growth from last year’s high base.

Seven, the amount of investment in communication equipment by enterprises increased by more than 10% on average in two years, and the investment structure was gradually optimized.

General Secretary of the Supreme Leader stressed that it is necessary to seize the opportunities given by industrial digitalization and digital industrialization and accelerate the construction of new infrastructure such as 5G networks and data centers. In accordance with the deployment of the CPC Central Committee and the State Council, the tax authorities actively implemented various preferential tax policies to support the development of new infrastructure industries, effectively promoting the gradual optimization of investment structure.

According to the data of VAT invoice, in the first quarter of 2021, the amount of communication access, mobile communication and communication transmission equipment purchased by enterprises increased by 78%, 72.9% and 46.7% respectively, with an average increase of 10.3%, 15.8% and 10.6% respectively in two years.

Eight, the amount of construction machinery purchased by construction enterprises increased by an average of 17.6% in two years, and the investment increased steadily.

The construction industry is one of the pillar industries of the national economy, which is closely related to the national economic development and the improvement of people’s livelihood. In the first quarter of 2021, the sales revenue of civil engineering construction industry increased by 44.8% year-on-year, with an average increase of 15.8% in two years, continuing the rapid growth trend since the fourth quarter of last year. The demand of construction enterprises for machinery and equipment has increased, and the amount of construction machinery purchased by construction enterprises has increased by 84.7% year-on-year, up by 38.3% compared with the same period in 2019, with an average increase of 17.6% in two years. Among them, the purchase of tower cranes, engineering drilling rigs, concrete machinery, digging and shoveling transportation equipment increased by 56.3%, 37.6%, 33% and 28% on average in two years respectively.

Nine, the domestic purchase amount of export enterprises increased by an average of 16% in two years, and foreign trade is expected to continue to improve.

The high-quality development of foreign trade is an important driving force for China’s economic growth. The tax authorities have actively implemented export tax rebate facilitation measures, continuously simplified the tax rebate process, compressed the time limit for tax rebate processing, and effectively eased the pressure on enterprises to occupy funds.

In the first quarter of 2021, the recovery of overseas demand continued to drive the rapid growth of China’s exports. The domestic purchase amount of national export enterprises increased by 46.5% year-on-year, 34.5% compared with the same period of 2019, with an average growth rate of 16% in two years, and the average annual growth rate was 2.9 percentage points higher than the national average.From the perspective of export market,The purchase amount of enterprises with RCEP (Regional Comprehensive Economic Partnership Agreement) member countries, countries (regions) along the "Belt and Road" and the European Union as the main export markets increased by 50.7%, 49.4% and 48.8% respectively, and continued to maintain a high growth level.From the perspective of export industry,Export enterprises such as electrical and mechanical equipment, special equipment and general equipment manufacturing have a strong willingness to purchase, and the purchase amount has increased by more than 50% year-on-year, reflecting that the export situation of mechanical and electrical products and high-tech products is good, and the expectation of expanding production in related industries has increased.

Ten, the sales revenue of agricultural machinery products increased by an average of 40% in two years, and agricultural mechanization was steadily advanced.

Agricultural mechanization and agricultural machinery and equipment are important foundations for changing agricultural development mode and improving rural productivity, and are important supports for implementing rural revitalization strategy. General Secretary of the Supreme Leader pointed out that it is necessary to put the development of agricultural science and technology in a more prominent position and vigorously promote agricultural mechanization and intelligence. The tax authorities play an active role in promoting the level of agricultural technology and equipment in China.

According to the data of VAT invoice, in the first quarter of 2021, the sales of agricultural machinery products continued to improve in 2020, and the sales revenue increased by 78.7% year-on-year, 95.9% over the same period of 2019, with an average growth of 40% in two years.

In the next step, the national tax system will be guided by Socialism with Chinese characteristics Thought of the Supreme Leader in the New Era, conscientiously implement the spirit of the Central Economic Work Conference and the Government Work Report, implement the Opinions on Further Deepening the Reform of Tax Collection and Management issued by the Central Office and the State Council, actively explore the use of big data to carry out multi-level tax economic analysis in a timely and in-depth manner, serve micro-market players, serve economic and social development, serve national macro-decision-making, and build a new development pattern, achieve high-quality development, and start an all-round building society.