Minister Hails Results of Proactive Fiscal Policy

Home>>Business

Last updated at: (Beijing Time) Wednesday, March 06, 2002

Minister Hails Results of Proactive Fiscal Policy

DISCUSSION

CHINESE

SEND TO FRIEND

In 2001, China continued to implement a proactive fiscal policy, issued a total of 150 billion yuan of long-term treasury bonds for the construction of infrastructural facilities, and expanded and fostered domestic demand.

Finance Minister Xiang Huaicheng made this remark Wednesday, in delivering the Report on the Implementation of the Central and Local Budgets for 2001 and on the Draft Central and Local Budgets for 2002, at the current session of the National People's Congress.

The minister said that the use of the funds from treasury bonds helped to ensure the timely construction of some major development projects in the western region, such as the Qinghai-Tibet railway line and projects to divert electricity from the west to the east. In addition, some of these funds were used to accelerate a number of major projects under construction.

As of the end of 2001, a total of 25,500 kilometers of highways had been opened to traffic, 4,000 kilometers of railway lines had been built, including 1,988 kilometers of double-track railway lines and 1,063 kilometers of electrified railway lines, and projects to upgrade rural power grids had been completed in 1,895 counties.

In addition, funds from treasury bonds were allocated to 781 technological transformation projects launched by key state-owned enterprises in the form of subsidies on the interest payments of bank loans.

The implementation of the proactive fiscal policy has played an important role in avoiding the impact of the Asian financial crisis, curbing the trend of deflation, protecting China against the influence exerted by the slowdown in the growth of the world economy and promoting sustained, rapid and sound development of the national economy for four consecutive years.

He said that deficit in the central budget and the national debt have increased to some extent, but the overall quality of the national economy has been raised and state revenue has increased

rapidly.

Deficit in the central budget for 2001 totaled 259.8 billion yuan, accounting for 2.7 percent of GDP, and outstanding debts totaled 1.5608 trillion yuan, 16.3 percent of GDP, all of which are still within safe limits.

He said that as China's economy continues to develop, its ability to stand risks will be further enhanced. In addition, the government has always paid close attention to the fluctuations in these indices and adopted some measures to prevent financial risks as follows:

The government made reasonable adjustments in the maturity periods of treasury bonds, reduced fund-raising costs and staggered repayment dates.

The government began to incorporate the expenditures for interest on treasury bonds into the regular budgets in 2000 and separate these expenditures from the principal of such bonds.

The government strove to improve the performance of funds from treasury bonds by tightening supervision and management over the use of such funds and implementing a system of centralized

payments from the treasury for funds earmarked for construction of some projects financed by treasury bonds.

He pointed out that the central authorities are paying close attention to some long-standing, hidden financial risks and taking measures to eliminate them step by step.

Questions?Comments? Click here

Proactive Fiscal Policy to Continue: Minister

>> Full Coverage