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Report on China's central, local budgets [Full Text]
(Xinhua)
Updated: 2008-03-21 11:23

The key expenditures in the central budget and the main fiscal and taxation policies for 2008 are as follows.

1. We will continue to follow a prudent fiscal policy.

Focusing on restructuring and achieving balanced development, we will improve and follow a prudent fiscal policy. We will coordinate this policy more closely with monetary policy and organically integrate efforts to balance total supply and demand, keep prices stable, make structural adjustments and foster equilibrium. We will maintain the positive trend of steady and fairly rapid economic growth, while working hard to prevent growth from becoming overheated. We will also prevent structural price increases from turning into clear cases of inflation.

We will reduce the deficit and the amount of capital raised through government bonds by an appropriate degree. The central budget deficit is projected to be 180 billion yuan, 20 billion yuan less than the actual deficit and 65 billion yuan less than the central budget deficit in 2007. It is predicted to drop to 0.6% of the GDP. Total central government investment in development projects will be 152.1 billion yuan, an increase of 17.7 billion yuan. This sum is made up of 30 billion yuan from bond sales, a reduction of 20 billion yuan, and 122.1 billion yuan from regular revenue, an increase of 37.7 billion yuan. The focus of central government investment will be on improving working and living conditions in the countryside, strengthening water conservancy and ecological and environmental protection, supporting the development of social programs, and developing major infrastructure projects.

We will promote improvement in the economic structure. Investment will be increased to address the problems related to agriculture, rural areas and farmers and to promote rural economic development. More emphasis will be put on supporting innovations in science and technology, promoting energy conservation and emissions reduction, and adjusting the industrial structure. We will implement fiscal and taxation policies to support the development of the western region, and we will increase transfer payments and promote balanced regional development. Support will be given to domestic production of major equipment, transformation of the old industrial base in northeast China, structural improvement in key industries, and development of alternative industries in cities that once depended on resources that are now exhausted. We will improve policies and measures related to export tax rebates, processing trade, and import and export tariffs. We will restrict the export of resource products and products whose production is energy intensive or highly polluting. However, we will support the export of high value-added products and encourage the import of resource products, products that save energy and reduce consumption, and key spare parts. We will follow a preferential import tariff policy that encourages energy saving, environmental protection and independent innovation. We will support enterprises that engage in innovative forms of foreign investment and cooperation and develop international business operations.

We will give fiscal and taxation policies a significant role in stabilizing prices. Fiscal and taxation mechanisms will be used to strongly support the production of grain, oil, meat, dairy products, vegetables and other agricultural products, ensure an adequate supply of daily necessities and curb excessively fast price rises. We will do our work related to the import of essential commodities well, and we will utilize reserves when necessary. We will promote a balance between supply and demand in the market and basically maintain price stability. We will pay close attention to the impact of rising prices on people's lives and promptly improve or implement policies on subsidies to ensure that the most vulnerable groups in society can meet their basic needs.

The recent disaster resulting from snow and ice storms caused significant losses to China's economy and made life very difficult for disaster victims. We will continue working vigorously to improve the functions of public finance, ensure adequate funding, and adopt policies and measures to strongly support disaster relief and reconstruction work. We will ensure an adequate supply of goods and materials to the disaster areas and offer more assistance to disaster victims to guarantee their basic living conditions before they get back on their feet. We will make funds available for agricultural losses due to the disaster so that agricultural production can be resumed as soon as possible. We will strongly support people in rebuilding their houses that collapsed as a result of the disaster and infrastructure repair in the areas of power grids, transportation, education, radio and television broadcasting, and health care. The central and local governments have allocated 55.52 billion yuan to support disaster relief and reconstruction work. This sum is made up of 27.543 billion yuan from the central government's regular budget and funds under its management and 27.977 billion yuan from local governments. In addition, we will implement favorable taxation policies to support grid and telecommunications enterprises.

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