Fiscal revenues up by 10.1 pct in 2013

China's national fiscal revenues reached 12.91 trillion yuan ($2.13 trillion) in 2013, according to a notice released Thursday by the Ministry of Finance (MOF), but although this was an increase of 10.1 percent year-on-year, the rise was the lowest in more than two decades.

The fiscal income of the central government increased by 7.1 percent to 6 trillion yuan, and the revenue of local authorities climbed by 12.9 percent to 6.9 trillion yuan, the notice said.

Katie Chen, a Beijing-based analyst with Moody's, told the Global Times Thursday that the growth in fiscal reve-nues was a result of the country's continuous economic growth in 2013.

"The rise in fiscal revenues is bene-ficial for both central and local governments, which can use the money to cover their operating and capital expenses and repay debts," Chen said.

However, the growth of 10.1 percent was the lowest since 1991, according to the MOF data.

This was partly because economic growth has slowed down, Ye Qing, depu-ty director of the Hubei Provincial Bureau of Statistics, told the Global Times Thursday.

According to the notice, China's national fiscal expenditure was 13.98 trillion yuan last year, up by 10.9 percent from 2012. The central government's spending was 2.05 trillion yuan, up 9.1 percent, and local authorities' expenditure came to 11.9 trillion yuan, up 11.3 percent.

While government income channels are limited, the public expects increased fiscal spending on urban infrastructure and social welfare, Ye said. "That is a conflict that both central and local authorities need to address in the future."

According to the MOF notice, the governments should "optimize the structure of fiscal expenditure, use fiscal reserves flexibly, utilize fiscal increments wisely, facilitate the deve-lopment of all social undertakings and endeavor to improve the public's lives."

China's national fiscal revenue and expenditure was not balanced last year, with the country spending over 1 trillion yuan more than it earned. The central government made nearly 4 trillion yuan more than it spent, but local governments spent 5 trillion yuan more than they earned.

A chain of reforms in various aspects of China's fiscal and taxation system, such as the central and local authorities' tax-sharing system and the distribution of fiscal transfers, is needed for the governments to solve the imbalance between own-source revenues and expenses, Chen said.

"The government has recognized that there is an imbalance and has announced some measures that could begin to address the situation, which we believe is a positive step," she noted.

One of the main results of the imbalance is China's mounting local government debt, Chen said.

According to the National Audit Office, the State auditor, the country's local government debt stood at 17.9 trillion yuan by the end of June last year, up by 67 percent from 2010.

The national value-added tax and consumption tax revenues from imported products dropped 5.4 percent from 2012 to 1.4 trillion yuan last year, and tariff income plummeted by 5.5 percent to 263 billion yuan, the notice said.

The decline was a result of China's lower-than-expected growth of imports, especially those with high tax rates such as high-emission cars.

Spending on social welfare increased by 14.6 percent to 1.45 trillion yuan, according to the notice.

Ye said that although China's fiscal spending on social welfare increases every year, the public still does not receive sufficient support from the government as the population is so large.