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Report on China's Central, Local Budgets

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6. Implementation of the NPC resolution on budgets

In accordance with the pertinent resolution of the Second Session of the Eleventh NPC and the guidelines of the Financial and Economic Affairs Commission of the NPC, we diligently implemented the policies on reforming taxes and fees, and strengthened the collection and management of revenue; implemented policies benefiting agriculture, rural areas, and farmers, and made good use of funds supporting them; worked hard to ensure and improve people's wellbeing; raised the performance of government investment; and pushed ahead with the reform of the public finance system. We made management of public finance more scientific and meticulous. We made substantial progress in revising the Budget Law, promulgated and implemented the Regulations on Lottery Management, and made continued progress in improving public finance legislation. We researched ways to set up a complete government budget system, further improved the system for managing the budgets of government-managed funds and the budget system for state capital operations, and started to compile budgets for social security funds on a trial basis. Budgetary spending was implemented more quickly, and implementation of the budget gradually became more balanced and efficient. We carried out a special examination of the budget for the appropriation of new assets, and intimately integrated asset management and budgetary management. The pilot program to assess the performance of budgetary spending in departments of the central government was expanded from 108 items in 74 departments in 2008 to 167 items in 94 departments last year. We created sound regulations and policies for managing fees and funds are deposited, put administrative and institutional fees collected by national and central government departments and institutions under budgetary management, and comprehensively carried out reform of non-tax revenue collection and management. We continued to improve the system of standards for employee quotas and fixed funding for basic expenditures, steadily advanced the pilot project for setting spending levels of departments on the basis of their assets, and accelerated the development of a system of standards for setting expenditure levels for programs. We reviewed programs and intensified work on creating a program database. We strengthened local public finances to guarantee the effective implementation of policies for ensuring people's wellbeing. We intensified oversight and inspection of public finance, with the focus on monitoring the use of funds and increasing oversight of the implementation of policies for boosting domestic demand and promoting economic growth. We urged local governments to accelerate the implementation of the central government investment budget, and ensured safe and efficient use of budgetary funds. We continued to informationize public finance and strengthen basic supervision of accounting and related work. We worked harder to make the administration of government finances more open, and gradually increased the timeliness and transparency of this work. We closely monitored and controlled debts owed by corporations to local financing platforms, and worked out policies and measures to effectively guard against risk from local government debts. A new stage was reached in controlling unauthorized departmental coffers.

The new achievements in budget implementation and other fiscal work in 2009 would not have been possible without the scientific decision making and firm leadership of the CPC Central Committee and the State Council; the oversight, guidance, and staunch support of the NPC and the CPPCC National Committee; and the close collaboration and hard work of all localities and departments. Nevertheless, we are keenly aware that serious problems concerning fiscal operations and management still exist. The structure of revenue growth is not sufficiently balanced, and funding for ensuring people's wellbeing needs to be increased. The system of departmental budgets needs to improve, and budgetary expenditures need to be implemented at a more balanced pace. Local government debts are mounting and financial risks cannot be overlooked. The transfer payment system is not yet sufficiently standardized; fiscal systems at and below the provincial level need to further improve, and township- and county-level governments in some areas are experiencing financial difficulties. Fiscal management remains fairly weak and there is an urgent need for the performance of government funds to improve. We will pay close attention to these problems and continue to adopt measures to solve them.

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