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Full Text: Report on China's central, local budgets

Updated: 2011-03-18 14:58
( Xinhua)

2. General requirements for compiling budgets and public finance work

On the basis of the central leadership's decisions and arrangements and in light of the present economic and fiscal situations, we have adopted the following guiding thought for compiling the 2011 budgets and doing public finance work: We need to comprehensively implement the guiding principles of the Seventeenth National Party Congress and the Fifth Plenary Session of the Seventeenth CPC Central Committee; take Deng Xiaoping Theory and the important thought of Three Represents as our guide; thoroughly implement the Scientific Outlook on Development; unwaveringly take scientific development as the theme and accelerating the transformation of the pattern of economic development as the main thread; continue to implement a proactive fiscal policy; deepen reform of the fiscal and tax systems; make adjustments in the distribution of national income; optimize the structure of expenditures; increase support for agriculture, rural areas, and farmers, education, medical and health care, social security and employment, low-income housing projects, energy conservation and environmental protection as well as less developed areas; effectively ensure and improve the wellbeing of the people; and promote economic growth and restructuring, and balanced regional and overall urban and rural development. We will adhere to the policy of managing financial matters in accordance with the law, taking all factors into consideration when making overall plans, and increasing revenue and reducing expenditures; strengthen the scientific management of public finances; strictly limit regular expenditures; increase returns on the use of government funds; and promote steady and rapid economic growth and social harmony and stability.

On the basis of this guiding thought, we will continue to implement a proactive fiscal policy in 2011, which will primarily be manifested in the following ways.

First, raising the incomes of urban and rural residents, and expanding consumer demand. We will spur the adjustment of national income distribution, increase government subsidies, raise the basic income of low-income urban and rural residents, and increase consumption capacity. We will improve all policies that strengthen agriculture and benefit farmers; strive to expand employment; support the creation of a sound mechanism for regularly raising the salaries of enterprise employees; raise the level of pension benefits for enterprise retirees and subsistence subsidies for low-income urban and rural residents; and implement the policy of linking pay to performance for teachers in compulsory education and for employees of public health institutions and community-based medical and health care institutions. We will improve policies that help expand consumption, such as the policies of providing subsidies for rural residents to purchase home appliances and subsidies for trading in old home appliances for new ones.

Second, striving to optimize the investment structure, and strengthening weak links in economic and social development. Funds allocated for capital construction investment in the central government budget will be used mainly to support the construction of low-income housing projects and the development of agricultural infrastructure, particularly water conservancy, and education and health infrastructure; energy conservation, emissions reductions, ecological conservation and environmental protection; and economic and social development in Xinjiang, Tibet and Tibetan ethnic areas in Sichuan, Yunnan, Gansu and Qinghai provinces; innovation; and the development of strategic emerging industries. We will give priority to ensuring funding for key ongoing projects, and begin construction on the major projects in the Twelfth Five-Year Plan in an orderly manner. At the same time, we will further encourage and guide healthy development of nongovernmental investment.

Third, adjusting and improving tax policies, stimulating enterprise development and guiding consumer spending. We will continue to reform and improve the tax system, straighten up and standardize administrative charges and government-managed funds, make better use of the role of taxation in adjusting the economy and distributing income, and spur accelerated transformation of the pattern of economic development. We will launch pilot projects for reforming VAT, improve the system of sales taxes, implement reform of the personal income tax system in stages and press ahead with reform of resource taxes. We will continue to implement the preferential income tax policy for some small enterprises with low profits and support the development of small and medium-sized enterprises. We will implement preferential tax policies that are beneficial for conserving energy, reducing emissions, protecting the environment and creating new jobs.

Fourth, further optimizing the structure of government expenditures, and ensuring and improving the wellbeing of the people. We will increase expenditures in the key areas of agriculture, rural areas, and farmers; less developed areas; social programs; restructuring; and scientific and technological innovation. We will promote the improvement of the people' s wellbeing and the development of all social undertakings, and ensure the masses receive more visible and tangible benefits. We will vigorously support the post-disaster rebuilding of Yushu and Zhugqu. We will reduce regular expenditures and genuinely lower administrative costs.

Fifth, vigorously supporting economic restructuring and balanced regional development, and spurring transformation of the pattern of economic development. We will increase support for scientific and technological innovation and give impetus to the industrial application of scientific and technological results. We will promote the development of strategic emerging industries, support the development of small and medium-sized enterprises and service industries, and actively move forward with industrial restructuring and with mergers, reorganizations and technological upgrading of enterprises. We will encourage and expand imports of key components and parts as well as advanced equipment, and introduce advanced technology. We will vigorously support energy conservation and emissions reductions, accelerate the creation of a mechanism to compensate for damage caused to the ecological environment, and comprehensively establish a mechanism for subsidizing and rewarding preservation of grassland ecological environments. We will increase general transfer payments from the central government to local governments; give more support to old revolutionary areas, ethnic areas, border areas and impoverished areas; and implement fiscal and tax policies to promote balanced regional development.

On the foundation of promoting steady and rapid economic development in 2011, we will concentrate our financial resources on a number of major issues to ensure and improve the wellbeing of the people: 1) We will comprehensively implement the requirements set forth in the National Medium- and Long-Term Plan for Education Reform and Development, increase education spending, and increase returns on the use of education funds. 2) We will energetically support reform of the pharmaceutical and healthcare systems and raise the level of medical services and medical insurance. 3) We will increase investment in low-income housing projects, and move forward with the construction of public rental housing and low-cost rental housing and the renovation of dangerous rural housing and all types of run-down areas. 4) We will support the accelerated establishment of a social security system that covers both urban and rural residents, further expand the scope of pilot projects in a new type of pension insurance for rural residents, and bring zero-income residents of cities and towns where pilot projects are underway into the insurance system. 5) We will strengthen agricultural and rural infrastructure; energetically carry out irrigation and water conservancy projects, harness small and medium-sized rivers, reinforce dangerous small reservoirs and prevent disasters from mountain torrents; and effectively improve working and living conditions in the countryside. 6) We will support energy conservation, emissions reductions and scientific and technological innovation; and spur economic restructuring and transformation of the pattern of economic development.

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