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��Home>>China Observer
China eyes balanced economic development
www.chinanews.cn 2006-01-26 15:27:47
Chinanews, Beijing, Jan. 26 (By Zhao Jianhua) - China's fiscal revenue
broke the 3 trillion RMB (US$370 billion) mark and recorded a
year-on-year increase of more than 500 billion RMB in 2005. The country
welcomed a bumper harvest once again and realized an ample treasury.
Possibilities of ways to spend the treasure chest on hand have naturally
drawn the attention of many people.
In a country of public ownership, the government holds abundant economic
resources. Therefore, the orientation of the government's investments and
the return on those investments are crucial to the whole nation's
economic operation and its long-term development.
Researchers believe that at a time when its coffers are swelling, China
should go about solving issues in the economic operation to pave way for
long-term development in the future. China should invest more in
education and other critical areas that have a significant bearing on its
prospects. At the same time, the country should make more efforts in
reversing unbalanced developments, including regional disparity and
disparity between cities and farms.
With regard to the above issues, Minister of Finance Jin Renqing said
that China would maintain continuity and stability of its macroeconomic
policies and continue its prudent fiscal policy. It will propel healthy
development of investment, consumption and export, boost economic
structural adjustments and economic growth mode transformation, help
enterprises elevate their capability in proprietary innovation, cultivate
and strengthen the entire market sector, expand domestic consumption and
bring into full play the role of consumption in driving economic growth.
In 2006, China will optimize the structure of expenditure, continue to
boost industrial structural adjustment and coordinated development
through government investment, support system innovation such as the tax
reform, and strengthen the weak segments of economic and social
development. The country will give priority to bolstering up rural
construction, science, education, culture, health, social security,
resource conservation, ecological construction, environmental protection
and western development, and ensure construction of key projects.
Moreover, the Chinese government will constrain blind construction and
overlapping construction, and control new projects of high energy
consumption, high pollution and immature technologies.
As to various "achievement projects" and "image projects," the government
reiterated that such extravagance should be scaled back with
determination to ensure steady growth of fiscal revenue and ceaseless
improvement of expenditure efficiency.
Facing increasingly prominent disparities between cities and farms and
between regions, the government responded that it would redouble its
efforts in transfer payment to spur coordinated development in different
regions and between urban and rural areas.
In 2005, the central government treasury earmarked more than 700 billion
yuan for transfer payment. Financial transfer payment totaled over 300
billion yuan and more than 90% of that was invested in central and
western regions. The present reform of income tax sharing system ensured
steady increase of the central treasury's transfer payment to the central
and western areas year by year. In 2005, the figure reached 110 billion
yuan. Since the reform effort commenced, the annual growth rate of
transfer payments has been over 50%.
China's fiscal and tax policies also mirror its efforts in eliminating
regional disparities. Jin said that China will focus on implementation of
preferential fiscal and tax policies for developing the western region
and rejuvenating old industrial bases such as the northeastern region.
The Ministry of Finance is studying, constituting and implementing fiscal
policies that would stimulate the growth of the country's central region.
It is striving to establish a favorable, interactive mechanism for
coordinated regional development that optimizes complementary advantages
of the eastern, central and western regions.
With regard to the gap between urban and rural areas, China has exempted
farmers from agricultural tax and offered direct agricultural subsidies
to farmers. In addition, the government has stressed compulsory rural
education. In 2005, the central government spent 7 billion yuan on
students from 34 million needy rural families in the central and western
regions. The government also supported the training of 2.8 million rural
laborers.
Starting in 2006, China will gradually establish a mechanism to guarantee
funds for compulsory education in rural regions. Compulsory education in
central and western regions will gain more financial support. Jin said
that this would help elevate the quality of farmers and propel equal
compulsory education in rural and urban areas and as a result, realize
equity in education.
One who does not care about the future will soon have trouble. Making a
long-term plan and laying a foundation in a bumper year is the only way
to realize bumper harvest year after year. Only balanced development is
sustainable. Various measures taken by the Chinese government indicate
that China is trying its best to maintain the favorable trend of "bumper
harvest."
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