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Highlights
Special> NPC & CPPCC Sessions 2013> Highlights
UPDATED: March 20, 2013
Full Text: Report on China's Central, Local Budgets
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Revenue of funds managed by local governments reached 3.420357 trillion yuan, a decrease of 10.5% mainly due to fewer receipts from the sale of state-owned land use rights. Adding the 117.946 billion yuan in transfer payments from central government-managed funds, the total revenue of local government-managed funds came to 3.538303 trillion yuan. Expenditure of local government-managed funds totaled 3.389387 trillion yuan, down 10.3%. This total includes 2.841819 trillion yuan of spending from the proceeds of selling state-owned land use rights. Surplus revenue from local government-managed funds was carried forward to 2013.

3. Implementation of budgets for state capital operations

In 2012, revenue from state capital operations nationwide reached 157.284 billion yuan, and total expenditure reached 147.966 billion yuan. The following is a breakdown of these figures.

Revenue from state capital operations of the central government totaled 97.083 billion yuan, 115% of the budgeted figure and an increase of 26.9%. Revenue exceeded the budgeted figure mainly because the proportion of profits from state capital operations of tobacco enterprises collected by the central government was raised five percentage points and the economic returns of enterprises in some industries exceeded expectations in 2011 (revenue from state capital operations of state-owned enterprises is collected as a certain proportion of their profits for the previous year). Adding the 3.107 billion yuan carried forward from 2011, revenue totaled 100.19 billion yuan. Expenditure on the central government's state capital operations came to 92.979 billion yuan, 106.3% of the budgeted figure and an increase of 20.8%. This figure includes 5 billion yuan, up 25%, spent on social security and other areas related to improving quality of life as planned in last year's public finance budgets. Surplus revenue from the central government's state capital operations was used to shore up the capital bases of the five largest power corporations (China Huaneng Group, China Datang Corporation, China Huadian Corporation, China Guodian Corporation, and China Power Investment Corporation), details of which the State Council reported to the Standing Committee of the Eleventh NPC.

Revenue from local governments' state capital operations totaled 60.201 billion yuan, and total expenditure amounted to 54.987 billion yuan.

4. Implementation of the NPC budget resolution

In accordance with the relevant resolution of the Fifth Session of the Eleventh NPC, as well as the guidelines of the NPC Financial and Economic Affairs Commission, we strived to do better in public finance work.

First, we faithfully followed a proactive fiscal policy. We increased structural tax reductions and extended the pilot project to replace business tax with VAT from Shanghai to nine provinces and municipalities directly under the central government, including Beijing, and three cities specially designated in the state plan, thereby effectively promoting the development of the service sector and the optimization of the industrial structure and reducing the burden on enterprises. We raised VAT and business tax thresholds, and halved the corporate income tax on small businesses with low profits and expanded the scope of the policy to cover more businesses. Efforts were made to increase government subsidies, raise the income of low-income groups, and boost consumer spending. We improved the structure of government spending to direct more funding toward maintaining and improving quality of life and promote the development of education, health, social security, and other social programs. We better leveraged the role of fiscal and tax policies and worked to adjust the economic structure and balance regional development.

Second, we better ensured funding for county-level governments to perform their functions. We improved the mechanism for ensuring basic funding for governments at the county level, expanded its coverage, and increased the amount of funds guaranteed. The central government allocated a total of 107.5 billion yuan in awards and subsidies for this purpose, 30 billion yuan more than 2011, and provincial-level governments also carried out their responsibility in this regard, which basically made up the shortfall in funds for county-level governments and achieved the policy aim of ensuring these governments have sufficient funding to pay salaries, carry out normal operations, and safeguard the wellbeing of their residents.

Third, we strengthened management of local government debts. We further improved the system for managing local government debts, put them under standardized supervision, clarified who is responsible for repaying them, and saw to it that all local government bonds due in 2012 were redeemed on time. We also made notable progress in clearing debts of county-level governments.

Fourth, we pushed ahead with the work on releasing government budgets and final accounts. Relevant central government departments released their budgets and final accounts in accordance with relevant regulations. In addition to appropriations for spending on official overseas travel, official vehicles, and official hospitality disclosed in their 2011 final accounts and 2012 budgets, specific details regarding such expenditures were also made public. The information these departments provided was more meticulous, covered similar time periods, and was presented in a standardized form.

Fifth, we improved performance-based budget management. We worked hard to stress the importance of achieving results in the full course and every link of our budget management, formulated and promulgated a work plan for performance-based budget management, and made steady progress in carrying out pilot projects in this area. We also redoubled efforts to manage the implementation of budgetary expenditure, and implemented budgets more quickly. We tightened oversight of public finances, observed strict financial and economic discipline, and ensured smooth implementation of major policy decisions and plans of the central leadership.

Sixth, we dealt with suggestions and proposals. We handled a total of 3,803 suggestions and proposals in 2012. We also improved communication with NPC deputies and CPPCC National Committee members and increased efforts to translate their suggestions and proposals into policies and measures as well as concrete action.

The year 2012 was the last year of the term of this government. During the past five years, we fully implemented the policy decisions and plans of the CPC Central Committee and the State Council, strived to improve the structure of government spending, advanced reform of the fiscal and tax systems, strengthened scientific management of public finances, and made good use of its functions and role, thereby spurring steady, sound economic and social development and also giving the development and reform of public finance a new appearance.

Public finance played an effective role in macro-control. In response to the global financial crisis, finance departments comprehensively implemented a proactive fiscal policy, employed a full range of macro-control tools, and adopted a variety of well-targeted policies and measures. When formulating policies, we took a holistic and balanced approach in order to not only bolster domestic demand, particularly consumer demand, and strive to expand exports, but to increase effective supply by raising overall agricultural production capacity and supporting enterprises in developing production. We focused on imposing strong short-term macro-control but also paid attention to enhancing the sustainability of the country's development, thereby promoting steady and rapid economic development and continued improvement in people's lives. We managed public finances more scientifically, implemented policies with the proper force and pace, and kept China's deficit-to-GDP and debt-to-GDP ratios at safe levels. We strengthened supervision of local government debts, effectively managed and controlled risks, and maintained the sound operation and sustainability of public finance. From 2008 to 2012, government revenue increased at an average annual rate of 18% and totaled approximately 43.4 trillion yuan for the five-year period, 26.42 trillion yuan more than the total for the preceding five years, and government expenditure increased at an average annual rate of 20.4% and totaled approximately 46.37 trillion yuan for the five-year period, 28.65 trillion yuan more than the previous five-year period.

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