Following is the full text of the budget report delivered by Finance Minister Xiang Huaicheng at the Fifth Session of the Ninth National People's Congress on March 6, 2002:
REPORT ON THE IMPLEMENTATION OF THE CENTRAL AND LOCAL BUDGETS FOR 2001 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2002
Xiang Huaicheng, Minister of Finance
Fellow Deputies,
I have been entrusted by the State Council to submit a report on the implementation of the central and local budgets for 2001 and on the draft central and local budgets for 2002 for your examination and approval, and also for suggestions and comments from members of the National Committee of the Chinese People's Political Consultative Conference.
Under the correct leadership of the Party Central Committee and the State Council, in 2001 all local authorities and government departments conscientiously implemented the macro-control measures formulated by the central authorities, fulfilled the requirements for financial and economic work set at the Fourth Session of the Ninth National People's Congress and strove to boost and foster domestic demand and promote reforms. Despite a notable slowdown in the growth of the world economy, China's economy grew rapidly. On this basis, revenue increased considerably and the pattern of expenditures was further improved. This notably gave great support to the development of the national economy and various social undertakings and helped exercise the macro-control function.
The state budget for 2001 exceeded targets and the deficit in the central budget was smaller than expected. Total revenue for the whole country in 2001 amounted to 1.6371 trillion yuan ( excluding revenue from generation of debt, both here and below), 161.1 billion yuan over the budgeted figure and an increase of 297. 6 billion yuan or 22.2 percent over that of the previous year. Expenditures for the whole country totaled 1.8844 trillion yuan, 148.6 billion yuan over the budgeted figure and an increase of 295. 7 billion yuan or 18.6 percent over that of the previous year. Total expenditures exceeded revenue, leaving a deficit of 247.3 billion yuan.
Total revenue in the central budget for 2001 totaled 917.1 billion yuan, 74.8 billion yuan over the budgeted figure and an increase of 158.3 billion yuan or 20.9 percent over that of the previous year. This figure includes 857.8 billion yuan in revenue collected by the central government, 74.8 billion yuan over the budgeted figure, and 59.3 billion yuan turned over to the central government by local authorities, the same as the budgeted figure. Total expenditures in the central budget for 2001 amounted to 1. 1769 trillion yuan, 74.8 billion yuan over the budgeted figure. This figure includes 575.4 billion yuan of expenditures for the central government, 9.1 billion yuan less than the budgeted figure, and 601.5 billion yuan in the form of subsidies for local authorities, 83.9 billion yuan over the budgeted figure. Expenditures in the central budget exceeded revenue, leaving a deficit of 259.8 billion yuan, the same as the figure approved at the Fourth Session of the Ninth National People's Congress.
Total revenue in the local budgets in 2001 came to 1.3808 trillion yuan, 170.2 billion yuan over the budgeted figure and an increase of 273.7 billion yuan or 24.7 percent over that of the previous year. This figure includes 779.3 billion yuan in revenue collected by local authorities, 86.3 billion yuan over the budgeted figure, and 601.5 billion yuan in subsidies granted to local authorities by the central government, 83.9 billion yuan over the budgeted figure. Total expenditures in the local budgets amounted to 1.3683 trillion yuan, 157.7 billion yuan over the budgeted figure. This figure includes 1.309 trillion yuan of expenditures in the local budgets, 157.7 billion yuan over the budgeted figure, and 59.3 billion yuan turned over to the central government, the same as the budgeted figure. Total local revenue exceeded expenditures, leaving a surplus of 12.5 billion yuan.
In addition, central revenue from generation of debt in 2001 totaled 460.4 billion yuan. This figure includes 199.9 billion yuan for servicing domestic and foreign debt, 259.8 billion yuan to cover the deficit for 2001 and 700 million yuan for supplementing the central budget debt repayment fund. Total revenue from the funds controlled by the central government in 2001 came to 105.3 billion yuan and total expenditures by the central government taken from the above funds amounted to 105.3 billion yuan.
These figures may change a little when the final calculations are made for the central and local budgets.
Central and local revenues increased considerably and some items of expenditures varied greatly from the budgeted amounts. Total national revenue in 2001 was up 22.2 percent over that of the previous year. This was due to steady economic growth, continued improvement in the performance of enterprises, efforts to further tighten tax collection and management and a number of special factors which led to revenue increase. The vehicle purchase surcharge was converted into the vehicle purchase tax and put under budgetary control, resulting in a revenue increase of 26. 6 billion yuan. Receipts from reduction of the number of shares held by the state became a special item of revenue turned over to state finance, resulting in an increase of 12.2 billion yuan, consisting mainly of 11 billion yuan of income from reduction of state shares listed on overseas stock markets. The People's Bank of China turned over 18.8 billion yuan of revenue from previous years to the state. With the exception of special factors which led to revenue increase, calculated according to comparable factors, revenue for the whole country in 2001 increased by 17.9 percent over that of the previous year, and revenue in the central budget was up 14.5 percent.
Revenue in the central budget for 2001 exceeded the budgeted figure by 74.8 billion yuan, and total revenue in the local budgets exceeded the budgeted figure by 86.3 billion yuan. But financial departments were not able to divert to other purposes some extra revenue for special use and many key items required more funding than anticipated. All this made it difficult to ensure that revenue met all expenditures. The Decision of the Standing Committee of the National People's Congress on Strengthening Examination and Supervision of the Central Budget stipulates that "Any extra revenue in the central budget may be used to offset its deficit or cover other necessary expenditures." According to this decision and in light of actual needs of social and economic development, the extra revenue in the central budget was mainly allocated for the following purposes: 8.6 billion yuan (increased revenue from collection of the vehicle purchase tax) for increased transportation expenditures, 31 billion yuan to subsidize national social security funds, 30 billion yuan to increase capital construction funding and 5.2 billion yuan to increase the wages and salaries of employees in government departments and institutions. Extra revenue in local budgets was mainly used to pay the overdue wages and salaries of employees in government departments and institutions, raise the wages and salaries of such employees in compliance with a relevant policy adopted in the fourth quarter of 2001, increase subsidies for social security, guarantee funding for key projects in education, science and technology, agriculture and protection of the ecological environment and support reform of the grain distribution system.
Two main factors led to great differences between budgeted figures and actual expenditures for some items in the central budget for 2001. First, some policies were either adopted or amended during implementation of the budget. For example, in October 2001, the state increased the wages and salaries of employees in government departments and institutions once again to boost domestic demand. In light of the results of experimentation with the reform of taxes and fees in rural areas, the State Council stepped up the pace of the reform. Export tax refund quotas were appropriately increased to further expand exports. Second, some items in the central budget were transferred to local budgets during implementation of the budget, including expenditures for capital construction, geological prospecting, culture and education, science and public health. (more)
(Xinhua News Agency March 18, 2002)
