However, he warned that the impact of the slowing growth rate of international trade and economy, which has already had its effect, may become more apparent on China's economic growth and exports in the latter half of this year.

Xiang made the remarks Thursday while delivering a report on the final accounting of central revenues and expenditures of last year to the ongoing 22nd session of the National People's Congress Standing Committee, China's top legislative body.

Xiang reported to senior legislators Thursday that the January-May revenue hit 646.258 billion yuan (US$78 billion), an increase of 144.965 billion yuan (US$17.5 billion) against last year. State expenditure totalled 532.423 billion yuan (US$64.38 billion) in the same period.

National revenue last year was 1.34 trillion yuan (US$162 billion) and State expenditures hit 1.59 trillion yuan (US$192 billion), Xiang said, with a deficit of 247.4 billion yuan (US$29.9 billion).

He attributed the growth of revenue to the enhanced macroeconomic regulatory measures and expansion of exports and domestic demand.

The lawmakers also heard a report on the auditing of last year's central budget performance and on other revenues and expenditures which was made by Li Jinhua, auditor-general of the National Audit Office.

The practice of "departmental budgets'' should be extended to increase the efficiency of the use of financial capital, Li said.

Departmental budgets are a major financial reform proposed by the Ministry of Finance last year to increase completeness and transparency of budgets.

Under the practice, extra budget funds, as well as budget funds of all departments within a ministry, are included in the budget management to fully reflect all revenues and expenditures.

It was conducted in the ministries of education, science and technology, agriculture, and labour and social security for trial operation last year.

The auditing of the four ministries has shown that departmental budgets have played a positive role in the regulation and enhancement of budget management, Li said.

(China Daily 06/29/2001)