Implementation of a pro-active fiscal policy has effectively boosted domestic demand and promoted a sustained, rapid and sound development of the national economy, stimulating economic growth by 1.5 percentage points, 2.0 percentage points and 1.7 percentage points over the past three years.
This was said by Xiang Huaicheng, minister of finance, in his Report on the Central and Local Budgets for 2000 and the Draft Central and Local Budgets for 2001 on Tuesday, the second day of the Fourth Session of the Ninth National People's Congress (NPC).
In accordance with requirements set by the National People's Congress and its Standing Committee, all departments under the State Council fully implemented the pro-active fiscal policy in 2000. They selected projects to be financed by treasury bonds on the basis of the direction and priorities specified by the State Council, rejecting all redundant or unfeasible projects, the minister said.
According to the official, supervision of construction projects was tightened and their quality improved. The entire process of using funds obtained through the sale of treasury bonds was supervised and examined, results of the utilization of these funds were reported, and losses and waste were prevented and reduced.
Great efforts were made to raise funds, lose no time in carrying out related work and conscientiously implement the policy of readjusting income distribution and other policy measures designed to encourage investment, stimulate consumption and support exports, all of which were formulated by the Party Central Committee in 1999, he noted.
Implementation of the pro-active fiscal policy has effectively boosted domestic demand and promoted a sustained, rapid and sound development of the national economy, stimulating economic growth by 1.5 percentage points, 2.0 percentage points and 1.7 percentage points over the past three years, the minister stressed.
Furthermore, he said, China strengthened construction of key projects and made great efforts to accomplish some major tasks which "we have longed to fulfill for years." Economic restructuring was promoted, the quality of economic growth was raised and economic performance of enterprises improved, he noted.
Experience has shown that it is entirely correct to revise the financial policy in light of changes in international and domestic economic situations, he said. "In particular, the shift of emphasis from only increasing investment to boosting both investment and consumption enabled us to gain and accumulate experience for coping with a deflationary trend," the official said, adding that these efforts have fully shown that the central government is skilled in managing the macroeconomy.
Xiang went on to say that last year, revenue increased steadily and the state's financial resources grew stronger. Revenue in the central budget for 2000 was up 113.7 billion yuan (US$13.75 billion) over that of the previous year. Adding the increase of 79.9 billion yuan from local budgets, total national revenue was up 193.6 billion yuan, or up 16.9 percent, which was a greater increase than the annual average growth rate during the period of the Ninth Five-Year Plan.
The minister attributed the great increase to the following factors:
First, China continued implementing a pro-active fiscal policy, which helped boost economic growth. More taxes were collected when some preferential tax policies expired. The price of crude oil rose, and the development of the Golden Tax Project (a national computer network for keeping track of value-added tax receipts) was accelerated. Total value-added tax increased by 67.064 billion yuan over that of the previous year, 23.214 billion yuan greater than the budgeted amount.
Second, foreign trade grew rapidly, and import volume increased by a big margin, resulting in a total increase of 66.418 billion yuan from import taxes over the amount of the previous year, or 67. 703 billion yuan more than the budgeted amount.
Third, the objectives of reforming state-owned enterprises and turning around their operations within three years were basically attained. The performance of enterprises improved notably, and the total amount of enterprise income turned over to the state increased.
Fourth, the volume of business in the banking, insurance, real estate, construction and installation sectors, as well as in tourism, catering and other service trades, grew fairly rapidly. This resulted in an increase of 19.945 billion yuan in business tax over the previous year, or 6.801 billion yuan more than the budgeted figure.
Fifth, securities market transactions were brisk with greater volume of business. Total receipts from the stamp tax on securities transactions increased by 23.293 billion yuan over the previous year, or 28.44 billion yuan more than the budgeted figure.
To sum up, he said, the increase in revenue in 2000 was mainly due to a higher rate of economic growth, improvement in economic performance and the results of efforts to rectify financial and economic order, tighten tax collection and management and collect tax in accordance with law.
This fully shows that the pro-active fiscal policy and other macro-control measures adopted by the Party Central Committee have produced notable results, he said.
(Xinhua 03/06/2001)
