Sources with the Ministry of Finance (MoF) have confirmed the
country will continue with the prudent fiscal policies it has taken
since 2005.
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Ministry spokesman, Zhang Tong, told Xinhua before the opening of
an MoF conference that in contrast to austere fiscal policies a
more moderate approach was required. Such moves were taken when
total supply and demand were equal but there were some structural
imbalances.
China saw a threat from rising inflation, excessive investment
in some industries and 'bottlenecks' in coal, electricity,
petroleum and transportation in 2003. Since 2005 the government had
taken prudent fiscal policies that are different from the
pro-active policies it took since 1998 to avoid economy
overheating, said Zhang Tong.
These fiscal policies focus on controlling deficits, improving
economic structure, promoting reform, increasing revenue and
slowing expenditure, he said.
The Chinese government had started to change the direction of
fiscal policies by adjusting the scale of long-term treasury bonds
for development and optimizing use of them in investment
projects.
According to MoF statistics the deficit in the central budget
fell by 19.23 billion yuan (US$2.47 billion) last year. This is a
year-on-year decline of 0.4 percent.
Zhang said China had been expanding its fiscal expenditure in
agriculture, education, public health and social security in recent
years.
The MoF distributed 14.2 billion yuan in direct subsidies to
over 600 million grain planters this year.
As part of the prudent fiscal policies the MoF has endeavored to
minimize the income gap by improving income distribution policies
and supporting the construction of an energy-efficient and
environmentally friendly society by taxation adjustment, said
Zhang.
China's GDP grew by 10.7 percent in the first three quarters.
During that period 9.32 million people in urban areas found
employment. This accounts for 104 percent of the annual target.
By the end of September 182.4 million people had basic old-age
insurance, 150 million medical insurance, 110 million unemployment
insurance, 94.47 million work-related injury insurance and 22.3
million urban poor were in receipt of subsistence allowances,
according to MoF statistics.
(Xinhua News Agency December 18, 2006)