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China Considers Special Fund for Fiscal Revenue Deficiencies
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The Chinese government is considering the establishment of a special budget regulation fund to cover possible fiscal revenue deficiencies, according to a report in the China Business News.

The newspaper reported that the 50-billion-yuan fund will come from extra-budgetary fiscal revenue, and the proposal will go before the National People's Congress for approval in March.

Currently, extra-budgetary fiscal revenue is mainly used to erase the central government's financial deficits, pay export tax rebates and enhance transfer payments to less developed regions.

The paper said the Ministry of Finance would be responsible for the fund's management, but no official information is available.

Professor Wang Yongjun, of the Central University of Finance and Economics, said the government should use the fund as insurance against natural disasters and economic recession, but not as a channel to soak up extra-budgetary money.

Extra-budgetary financial revenue should be avoided through improvement of the budget system and more accurate predictions on economic development, Wang said.

The country's total fiscal revenue surged 21.9 percent year-on-year, or 677 billion yuan to a record 3.76 trillion yuan last year, about 220 billion yuan more than the budgetary revenue set at the beginning of 2006.

(Xinhua News Agency January 27, 2007)

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