2. Revenue projections and expenditure appropriations for 2016
(1) General public budgets
Revenue in the central government's general public budget is expected to reach 7.057 trillion yuan, an increase of 2.2% over the actual figure for 2015. Adding in the 100 billion yuan from the Central Budget Stabilization Fund and the 31.5 billion yuan from the budgets of central government-managed funds and central government state capital operations, total revenue in 2016 should amount to 7.1885 trillion yuan. Expenditures from the central government's general public budget are projected to reach 8.5885 trillion yuan, an increase of 6.3% (or an increase of 6.7%, if the use of the 172.5 billion yuan carried over from previous years is included). Total expenditures are projected to exceed total revenue leaving a deficit of 1.4 trillion yuan, an increase of 280 billion yuan over last year. The ceiling for the outstanding balance of central government bonds will be 12.590835 trillion yuan. The Central Budget Stabilization Fund will carry a balance of 15.637 billion yuan.
Expenditures in the central government's general public budget are divided into central government expenditures, tax rebates for local governments, general transfer payments to local governments, special transfer payments to local governments, and payments to central government reserve funds.
Central government expenditures are projected to total 2.7355 trillion yuan, up 7% over last year. This consists of 270.643 billion yuan for science and technology expenditures, up 9.1%; 51.971 billion yuan for foreign affairs-related expenditures, up 8.6%; 954.354 billion yuan for national defense spending, up 7.6%; 166.815 billion yuan for public security expenses, up 5.3%; 120.138 billion yuan for expenditures on general public services, up 13.7%; and 329.929 billion yuan for interest payments on debt, up 15.1%. Central government spending on official overseas visits, official vehicles, and official hospitality will adhere to the policy of zero-growth.
Central government tax rebates to local governments are projected to be 508.857 billion yuan, which is basically consistent with the actual figure for 2015.
General transfer payments to local governments will amount to 3.201782 trillion yuan, up 12.2% over last year. Of this amount, transfer payments for equalizing access to basic public services will account for 2.039225 trillion yuan, up 10.2%, which will be mainly used to help alleviate the burden on local governments due to falling revenue growth and increased expenditures; transfer payments to old revolutionary base areas, areas with concentrations of ethnic minorities, border areas, and poor areas will reach 153.791 billion yuan, up 22.4%; transfer payments for basic pension schemes will total 504.276 billion yuan, up 14.5%; and transfer payments for the rural and non-working urban resident health insurance systems will come to 242.627 billion yuan, up 14.3%.
Special transfer payments to local governments will come to 2.092361 trillion yuan, a reduction of 3.2% from last year. The number of items eligible for special transfer payments will be strictly limited and the payment amounts for each item will be effectively reduced, particularly with regard to projects that involve competitive areas or subsidies for enterprise operations. Expenditures that are not in line with policy intentions or are no longer highly beneficial, such as price subsidies for refined oil products, will be reduced by a large margin. Expenditures that have been made unnecessary due to changes of circumstances, such as interest subsidies on loans used to finance public infrastructure construction in development zones, will be canceled. Additionally, special transfer payments for miscellaneous or redundant local projects will be further reduced or canceled. At the same time, special transfer payments to be used for ensuring basic living standards will be increased overall, with increases in the following areas: 17.663 billion yuan for the quality improvement plan for modern vocational education, up 19.4%; 137.013 billion yuan in basic living allowances and subsidies for people facing financial difficulties, up 5.7%; 40.933 billion yuan in subsidies for entitled groups, up 19.8%; 54.121 billion yuan for public health services, up 8.8%; 14.113 billion yuan in subsidies for medical assistance, up 9.2%; 23.286 billion yuan in subsidies for agricultural resource and ecological conservation efforts, up 16.5%; 121.8 billion yuan in funds earmarked for central government subsidies for urban housing projects, up 0.8%; 26.335 billion yuan for renovating dilapidated rural houses, up 1.4%; and 39.771 billion yuan in allowances for the settlement of decommissioned military personnel, up 12.7%.
A total of 50 billion yuan will be appropriated for central government reserve funds.
Figure 2
Projected Revenue and Expenditures in the General Public Budget of the Central Government for 2016
Revenue in local governments' general public budgets is projected to total 8.663 trillion yuan, up 3.6% from last year. Adding in the 5.803 trillion yuan in tax rebates and transfer payments from the central government and the 40 billion yuan transferred from other local sources, total local government revenue is expected to reach 14.506 trillion yuan. Expenditures from local governments' general public budgets are projected to total 15.286 trillion yuan, which after deducting utilized carryover and surplus funds from last year and funds transferred from other sources is an increase of 6.3%. The projected local government deficit therefore stands at 780 billion yuan, an increase of 280 billion yuan over last year. This deficit will be made up for through the issuance of local government general bonds. The ceiling for the outstanding balance of local government general bonds will be 10.70724 trillion yuan.
Combining the general public budgets of the central and local governments, it is projected that nationwide revenue will amount to 15.72 trillion yuan, up 3% from last year. Adding in the 171.5 billion yuan transferred from other sources, total revenue available is expected to reach 15.8915 trillion yuan. Nationwide expenditures are budgeted at 18.0715 trillion yuan, which after deducting local governments' utilized carryover and surplus funds from last year and funds transferred from other sources is an increase of 6.7%. This will produce a national deficit of 2.18 trillion yuan, an increase of 560 billion yuan over 2015.
The above figures of budgeted revenue and expenditures for 2016 also take into account figures from government-managed fund budgets that were transferred into general public budgets: from January 1, 2016, the revenue and expenditures of five government-managed funds, such as water and soil conservation subsidies, were transferred into general public budgets. While budgetary revenue and expenditures for government-managed funds have been reduced, we have made corresponding increases in the estimated revenue and expenditure figures for the 2016 general public budgets as well as in the revenue and expenditure baseline figures for 2015.
2. Budgets for government-managed funds
Revenue into central government-managed funds is projected to reach 427.165 billion yuan, up 5% from last year. Adding in the 24.817 billion yuan carried forward from last year, revenue into central government-managed funds will total 451.982 billion yuan. Expenditures from central government-managed funds will be 451.982 billion yuan, up 5.5%. This figure consists of 340.523 billion yuan of central government expenditures, up 12.8%, and 111.459 billion yuan of transfer payments to local governments, down 11.9%.
Revenue into local government-managed funds is projected to be 3.290209 trillion yuan, down 12.4%. This figure includes 2.82486 trillion yuan from the sale of state-owned land use rights, down 13.2%. Adding in the 111.459 billion yuan in transfer payments from central government-managed funds and the 400 billion yuan of revenue generated from local government special debt (an increase of 300 billion yuan over last year), total revenue related to local government-managed funds is projected to be 3.801668 trillion yuan. Total expenditures related to local government-managed funds will be 3.801668 trillion yuan. This includes 3.202408 trillion yuan of expenditures related to the proceeds of selling state-owned land use rights, down 2.6%. The balance of outstanding special debt of local governments will be no more than 6.48019 trillion yuan.
Combining the budgets for the central and local government-managed funds, revenue into these funds is projected to be 3.717374 trillion yuan, a decrease of 10.7% from last year. Adding in the 24.817 billion yuan carried forward from last year and the 400 billion yuan of revenue generated from local government special debt, revenue into government-managed funds nationwide will be 4.142191 trillion yuan. Total expenditures related to these funds will reach 4.142191 trillion yuan, down 1.2%.
It should be noted that, following the inclusion of the revenue and expenditures of five government-managed funds, such as water and soil conservation subsidies, into general public budgets, total budgetary revenue and expenditures of central and local government-managed funds will decrease in 2016. Because of this, we have correspondingly lowered the baseline figures for 2015 so that the level of growth can be calculated on a comparable basis.
3. Budgets for state capital operations
In 2016, we will strive to further refine the budgeting system for state capital operations. First, the proportion of funds allocated from the state capital operations budget of the central government to its general public budget will be raised from 16% in 2015 to 19% this year. Second, a total of 68 enterprises, including China Railway Corporation, will be incorporated into the central government's state capital operations budget. Third, the utilization of funds will be prioritized towards addressing longstanding problems of SOEs, reducing overcapacity, and making proper arrangements for laid-off employees.
Budgetary revenue from the state capital operations of the central government is projected to be 140 billion yuan, down 13.2% from last year. This decrease comes primarily from lower than expected enterprise profits in the petroleum, petrochemical, steel, and coal industries. Adding in the 39.723 billion yuan carried forward from last year, total budgetary revenue from central government state capital operations is projected to be 179.723 billion yuan. Budgetary expenditures on these operations are expected to be 155.123 billion yuan, up 37.3%. Of this, 119.123 billion yuan is to be spent at the central level, an increase of 18.5%, and 36 billion yuan is to be transferred to local governments, an increase of 189.6%. A projected 24.6 billion yuan will be transferred into the general public budget.
