3. Executing budgets more effectively
First, we will strengthen the management of government revenue. We will ensure that taxes and fees are collected on the basis of law, that their collection is carried out in full, and that accounting schemes or other methods that seek to boost revenue only on paper are strictly prohibited. We will see that every policy related to tax and fee reductions is implemented and that any tax or fee not prescribed by law is not collected. We will closely follow, carefully analyze, and properly respond to developments in the government revenue situation.
Second, we will strengthen the management of budgetary expenditures. We will strictly enforce budgetary constraints and promptly approve the appropriation of government funds in strict accordance with the budgets approved by the NPC. We will carry out dynamic monitoring of budget execution to help ensure key organizations receiving large sums of government funds accelerate the execution of their budgets. We will urge those responsible for major programs to make thorough preparations so that work can begin on them the moment government funds are received.
Third, we will go further in putting idle funds to work. Funds carried forward for more than two years will be reviewed and taken back in accordance with regulations, while funds that have been allocated for two years or less will be reviewed and put to good use. We will redouble efforts to review idle funds in special fiscal accounts and extra-budgetary accounts of budget institutions. We will steadily carry out treasury cash management and conduct research on the establishment of a management system for the target balance of the treasury general account.
Fourth, we will speed up the development of internal controls. The internal control system will be established and implemented in all finance departments, and it will focus on budget management, fund distributions, and other areas. Under this system, the way power is exercised is determined on the basis of the matter in question, the way power is arranged is determined on the basis of the position in question, and the way power is delegated is determined on the basis of the level of government in question. We will strengthen regulation over internal procedures and establish mechanisms to effectively respond to risks and ensure greater accountability in order to improve administrative efficiency.
4. Innovating channels of government investment and spending
First, we will work to see that the PPP model becomes widespread. We will conduct research to assist legislative work related to the law on government and non-government capital cooperation. We will issue regulations on public finance management for PPP projects and create standard model contracts and industry-specific contracts. We will work to ensure that funds for supporting financing through PPP models operate smoothly so that more projects can come to fruition. We will help guarantee quality implementation of PPP projects by strictly regulating their operations.
Second, we will make effective use of all types of government investment funds. With regard to special funds retained in competitive fields with strong externalities, we will control the scale of their funding, ensure a focus on key areas, phase out administrative distribution in favor of market operating models such as fund management, gradually integrate these funds with financial capital, and use government capital to encourage the investment of private capital.
Third, we will actively encourage government procurement of services. We will step up the preparation of catalogs of services for government procurement by including more services and more areas. We will establish a performance evaluation mechanism for such services and explore the possibility of third-party evaluations.
Fourth, we will improve the government procurement system. We will implement the policy of holding procurement quotas in reserve for small and medium enterprises. We will further expand the range of energy-efficient and environmentally friendly products eligible for government procurement. We will put in place a policy of providing support to innovative products through government procurement on a trial basis. We will move forward with reform to adopt bulk and centralized procurement practices to help lower government procurement costs.
5. Strengthening the management of local government debt
We will enhance awareness in relation to risk prevention and control, and while strengthening management of central government debt, we will tighten regulation of the debt of local governments. First, we will strengthen debt ceiling management and budgetary management. We will establish appropriate ceilings under which local governments may borrow and pay back debt in order to keep such debt under strict control. The revenue and expenses generated by local government debt will be incorporated into their budgets and will be subject to oversight by the people's congresses at the same level. A permanent mechanism will also be put in place to see that local government debt ceilings as well as the revenue and expenses generated by local government debt are publically released alongside local government budgets.
Second, we will improve risk evaluation and early warning mechanisms. We will utilize a wide variety of risk indicators to evaluate the risks that debt poses to local governments and issue warnings to local governments exposed to high levels of risk. We will urge and guide localities in establishing mechanisms for responding to debt risk emergencies.
Third, we will carry out our work related to local government bond issuance. We will make improvements to issuance methods, increase the usage of market-based pricing in bond issuance, and coordinate the pace of national and local bond issuance. We will conduct research on promoting diversification among the investors who hold local government bonds and actively work to establish a secondary market for these bonds in order to improve liquidity. We will guide local governments in deciding on an appropriate amount of new bonds to issue to replace their outstanding debt based on considerations of repayment needs and market conditions, and urge them to accelerate the replacement of treasury funds generated from the issuance of bonds. At the same time, we will improve supervision, evaluation, and accountability mechanisms for local government debt. We will work to accelerate the market-based transformation and financing of financing platform companies. We will improve management of all government debt. We will strengthen oversight to prevent the illegal borrowing or guaranty of debt and increase punishment for such activities.
Fellow Deputies,
The completion of the budgets for 2016 is of great importance. We should rally more closely around the CPC Central Committee headed by General Secretary Xi Jinping, hold aloft the great banner of socialism with Chinese characteristics, conscientiously accept the oversight of the NPC, solicit the comments and suggestions of the CPPCC National Committee, and forge ahead with determination and hard work to better perform our fiscal duties, making a positive contribution to the promotion of sustained, sound economic development as well as social harmony and stability.
