Full text: Report on China's central, local budgets(28)

5. Budgets for State Capital Operations

1) Budget for the central government's state capital operations In 2012, the budget for the central government's state capital operations will be further expanded to include enterprises affiliated to some ministries and commissions, and more funds will be used to ensure and improve people's living standards.

Revenue from the central government's state capital operations will reach 84.4 billion yuan, up 10.3%. This figure includes 82.3 billion yuan of profits and 2 billion yuan of proceeds from the sale of state assets. Adding the 3.107 billion yuan carried over from last year, available revenue from the central government's state capital operations will total 87.507 billion yuan.

Expenditure on the central government's state capital operations will be 87.507 billion yuan, up 13.7%. Breaking it down, 8 billion yuan will be used for mergers and reorganizations of central government enterprises, 13.3 billion yuan for restructuring the state sector and industrial restructuring, 11 billion yuan to foster major scientific and technological innovations, 8 billion yuan for energy conservation and emissions reductions, 8 billion yuan to support enterprises in "going global," 22.5 billion yuan to subsidize the reform of enterprises, 4.5 billion yuan to develop emerging industries, 2.01 billion yuan from the sale of state-owned shares of enterprises to replenish the national social security fund, 5.197 billion yuan for other expenditures related to SOE reforms and development, and 5 billion yuan (up 25%) to be transferred to the public finance budget and used for social security and other areas related to ensuring people's living standards.

(2) Budgets for local governments' state capital operations

Revenue from local governments' state capital operations will total 40.249 billion yuan. This includes 20.898 billion yuan of profits, 7.62 billion yuan of dividends, 7.991 billion yuan from the transfer of state assets, and 3.602 billion yuan of other receipts from state capital operations.

Expenditure on local governments' state capital operations will amount to 40.249 billion yuan. Included in this sum is 3.046 billion yuan for mergers and reorganizations of enterprises, 16.698 billion yuan for restructuring the state sector and industrial restructuring, 2.811 billion yuan for spurring scientific and technological innovations and industrialization, 1.679 billion yuan for energy conservation and emissions reductions, 7.02 billion yuan for subsidizing the reform of enterprises, and 4.91 billion yuan for other expenditures.

Adding up central and local governments' budgetary appropriations, total revenue from state capital operations will be 124.649 billion yuan, and adding the 3.107 billion yuan carried forward from last year, disposable revenue will amount to 127.756 billion yuan. Total expenditure on state capital operations will reach 127.756 billion yuan.

Combining all budgetary appropriations for education from public finances and government-managed funds as well as other government outlays in this area, total government education spending will reach 2.198463 trillion yuan in 2012, which is over 4% of GDP.

3. Making Public Finance Management More Scientific and Meticulous

We need to strengthen the legal framework for managing public finances, do a good job of revising the Budget Law and Law on Certified Public Accountants, and continue legislative work concerning a law on the environmental protection tax, an asset valuation law, regulations on state capital operations budgets, and other laws and administrative regulations. We will make our budgets more detailed, further reduce the size of expenditure budgets compiled by finance departments for relevant departments and projects, and make sure funds are available for more budgetary items at the beginning of the year. We will strengthen management of basic expenditure budgets, promote compilation of itemized rolling budgets, and improve the mechanism for evaluating key items before including them in the budget. We will tighten management over the implementation of budgetary expenditure, and make budgetary spending more timely, balanced, effective, and secure. We will strictly standardize the management over the use of surplus revenue. We will expand performance evaluation trials for budgetary expenditure, and all central government departments, provinces, cities, and counties should, in principle, carry out such trials. We will improve foundational work on fiscal management and its development at the primary level.

We will strengthen efforts to manage local government debts and prevent risks. In accordance with the principles of managing debts by type, taking different approaches to different situations, and clearing them in a step-by-step manner, we will continue to deal with existing debts prudently, and make clear who is responsible for repaying them. We will continue to straighten out and standardize financing corporations run by local governments, and resolutely prohibit governments at all levels from guaranteeing or promising the payment of debts in any form in violation of regulations. In addition, we need to combine short-term response measures with long-term institution building, and put in place a sound system for managing local government debts. We will strictly control new debts of local governments, set up a mechanism to control the scale of their debts and a mechanism to warn when they get too large, and gradually place debt-generated revenue and debt repayments under budgetary management on the basis of their type.

We will push forward efforts to make government budgets and final accounts more open and budgetary work more transparent. We will make more and detailed departmental budgets and final accounts available to the public. We will release to the public information regarding government agencies' spending on official overseas trips, official vehicles, and official hospitality as well as their administrative overheads, and make special expenditures of primary-level governments publicly accessible. We will exercise strict fiscal oversight, and intensify supervision and inspection of the implementation of major decisions of the central leadership and the use of funds for ensuring and improving living standards and for work related to agriculture, rural areas, and farmers in order to ensure that all policies are put into effect.