Full text: Report on China's central, local budgets (7)

3. Revenue and expenditure budgets for 2014

In accordance with the mid-to-long term trends and changes in China's economic and social development and in light of the expenditure demands of every sector in the next few years as well as the targets and major tasks for economic and social development in 2014 determined by the CPC Central Committee and the State Council, we followed a realistic and pragmatic approach, made active yet prudent plans, and left some leeway in preparing the revenue budgets. In preparing the expenditure budgets, we have taken all factors into consideration, highlighted priorities, and ensured spending in some areas while reducing it in others. In preparing the budgets for public finances, government-managed funds, state capital operations, and social insurance funds, we made the following overall arrangements:

(1) Public finance budgets for 2014

Revenue of the central government is estimated at 6.438 trillion yuan, an increase of 7% over the actual figure for 2013 (as below). It should be noted that in line with the guiding principles of the decision adopted at the Third Plenary Session of the Eighteenth Party Central Committee, revenue budgets have become more anticipatory and less binding, and revenue targets are now seen as projections instead of tasks to accomplish. Adding the 100 billion yuan from the Central Budget Stabilization Fund, revenue in 2014 should amount to 6.538 trillion yuan. Central government expenditure is projected to reach 7.488 trillion yuan, an increase of 9.3% (up 8.6% after deducting the reserve funds). This consists of 2.2506 trillion yuan incurred at the central level, 5.1874 trillion yuan paid out as tax rebates and transfer payments to local governments, and 50 billion yuan of reserve funds for the central budget. Therefore, total expenditure exceeds total revenue, leaving a deficit of 950 billion yuan, 100 billion yuan more than in 2013. The ceiling for the outstanding balance on government bonds in the central budget stands at 10.070835 trillion yuan. The balance on the Central Budget Stabilization Fund will total 48.308 billion yuan.

Figure 3 Budgetary Balance of Central Government Finances in 2014

Revenue collected by local governments is expected to reach 7.515 trillion yuan, up 9%. Including the 5.1874 trillion yuan in tax rebates and transfer payments from the central government, revenue of local governments is estimated at 12.7024 trillion yuan. Local government expenditure is projected to be 13.0031 trillion yuan, up 9%. Adding the 99.3 billion yuan used to repay the principal on local government bonds, total expenditure will come to 13.1024 trillion yuan. Total expenditure exceeds total revenue by 400 billion yuan, 50 billion yuan more than in 2013. With the approval of the State Council, the deficit will be covered by the Ministry of Finance issuing bonds on behalf of local governments, both of which will be incorporated into provincial-level government budgets. It should be noted that as revenue and expenditure budgets of local governments are prepared by local people' s governments and subject to approval of people' s congresses at their respective levels, related data is still being collected. The above-mentioned revenue projections and expenditure appropriations in the local budgets have been compiled by the central finance authorities.

Combining the central and local budgets, national revenue is projected to be 13.953 trillion yuan, up 8%. Adding the 100 billion yuan from the Central Budget Stabilization Fund, total available revenue is estimated to reach 14.053 trillion yuan. National expenditure is budgeted at 15.3037 trillion yuan, up 9.5%. Including the 99.3 billion yuan to be used to repay the principal on local government bonds, total expenditure will hit 15.403 trillion yuan. Total expenditure exceeds total revenue by 1.35 trillion yuan, an increase of 150 billion yuan from 2013. The deficit is equivalent to about 2.1% of GDP.

Main expenditure items under the central budget in 2014 are as follows:

The appropriation for agriculture, forestry and water conservancy is 648.747 billion yuan, up 8.6%.

The appropriation for social security and employment is 715.296 billion yuan, up 9.8%.

The appropriation for education is 413.355 billion yuan, up 9.1%.

The appropriation for science and technology is 267.39 billion yuan, up 8.9%.

The appropriation for culture, sports and the media is 51.229 billion yuan, up 9.2%.

The appropriation for medical and health care and family planning is 303.805 billion yuan, up 15.1%.

The appropriation for guaranteeing housing is 252.869 billion yuan, up 9%.

The appropriation for energy conservation and environmental protection is 210.909, up 7.1%.

The appropriation for transport is 434.568 billion yuan, up 5.1%.

The appropriation for stockpiling grain, edible oils and other materials is 139.396 billion yuan, up 10.1%.

The appropriation for national defense is 808.23 billion yuan, up 12.2%.

The appropriation for public security is 205.065 billion yuan, up 6.1%.

The appropriation for general public services is 124.515 billion yuan, up 2.6%.

The appropriation for natural resource exploration and information technology is 60.577 billion yuan, down 20.7%, which is mainly because of the decrease in expenditure on infrastructure construction.

The appropriation for commercial services is 36.669 billion yuan, a reduction of 19.1%, which is primarily due to the spending decrease because no new appropriation will be made for 2014 after the expiration of the policy to provide rural residents with subsidies for the purchase of home appliances.

Central government tax rebates and transfer payments to local governments will reach 5.1874 trillion yuan, up 8%. Of this amount, general transfer payments will account for 2.721787 trillion yuan, up 10.9%, and special transfer payments will account for 1.956922 trillion yuan, up 6.1%. General transfer payments for equalizing access to basic public services will come to 1.080781 trillion yuan, an increase of 10.1%, which includes 167.8 billion yuan in awards and subsidies for implementing the mechanism for ensuring basic funding for county-level governments, up 10%; 48 billion yuan for key ecological zones, up 13.5%; and 34.981 billion yuan in awards to major grain-producing counties, up 10%. General transfer payments to old revolutionary base areas, ethnic minority areas, and border areas will total 69.522 billion yuan, up 11.8%.

(2) Budgets for government-managed funds

Receipts of central government-managed funds will amount to 416.862 billion yuan, down 1.5%. Adding the 80.696 billion yuan carried forward from last year, total receipts of central government-managed funds will reach 497.558 billion yuan in 2014. Outlays of central government-managed funds will be 497.558 billion yuan, up 16.8%. This figure consists of 342.237 billion yuan of central government spending, up 24%, and 155.321 billion yuan in transfer payments to local governments, up 3.6%.

Revenue of funds managed by local governments will reach 4.314061 trillion yuan, down 10.1%, which includes 3.637131 trillion yuan from the sale of state-owned land-use rights, down 11.8%. Adding the 155.321 billion yuan in transfer payments from central government-managed funds, revenue of local government-managed funds will total 4.469382 trillion yuan. Outlays of local government-managed funds will be 4.469382 trillion yuan, down 5.6%. This figure includes 3.687114 trillion yuan of spending allocated from the proceeds of selling state-owned land-use rights, down 9.2%.

Adding the central and local budgets together, revenue of the central and local government-managed funds will come to 4.730923 trillion yuan, a decrease of 9.4%. Including the 80.696 billion yuan carried forward from last year, total receipts of government-managed funds will reach 4.811619 trillion yuan nationwide, and expenditure of these funds will come to the same amount, a decrease of 4%.

(3) Budgets for state capital operations

Revenue of the central government's state capital operations will reach 142.6 billion yuan, up 34.7%. Adding the 15.203 billion yuan carried over from last year, proceeds will total 157.803 billion yuan. Expenditure on the central government's state capital operations will total 157.803 billion yuan, up 61.3%. This figure includes 18.4 billion yuan transferred to the public finance budget to be spent on improving people's living standards, such as social security, and is up 183.1%. It accounts for 13% of the proceeds from state capital operations that central government enterprises will turn over to the government.

Revenue and expenditure from local government state capital operations will each be 55.579 billion yuan.

Combining the central and local budgets, national revenue from state capital operations will reach 198.179 billion yuan. Adding the 15.203 billion yuan carried over from last year, national revenue will total 213.382 billion yuan. Expenditures of state capital operations will amount to 213.382 billion yuan.

(4) Budgets for social insurance funds

National revenue of social insurance funds is estimated at 3.766651 trillion yuan, an increase of 9.1%, including 2.808756 trillion yuan of insurance premiums and 821.185 billion yuan of government subsidies. Expenditure of social insurance funds will total 3.2581 trillion yuan nationwide, an increase of 13.9%. We have calculated this year's revenue and expenditure to show a surplus of 508.551 billion yuan, and the year-end balance after the balance from 2013 is rolled over is projected to be 4.852736 trillion yuan.