Fiscal Policy to Back Building of Well-off Society in China: Minister

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Last updated at: (Beijing Time) Wednesday, November 13, 2002

Fiscal Policy to Back Building of Well-off Society in China: Minister

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Chinese Finance Minister Xiang Huaicheng who is attending the on-going 16th National Congress of the Communist Party of China (CPC) has pledged to take a forceful financial policy in the years to come to back the nation's building of a well-off society in an all-round way.

"We will continue to improve and optimize the revenue system to give a full play to its regulating function for income distribution and create a fairer environment for competitions among various kinds of enterprises," he said in an interview with Xinhua.

The reform in tax and fee will be advanced steadily, particularly in the rural areas, to standardize the order of government revenue distribution and lighten burdens on farmers, enterprises and the society, Xiang said.

China will continue to improve its tax assignment system and payment transfer system to rationalize distribution relations between the central and local governments in a bid to promote a coordinated economic development among different regions and pave the way for the implementation of the develop-the-west strategy.

In line with the development of a market economy, said the minister, the structure of financial expenditure will be readjusted and optimized, and investment in agriculture, science and technology, education, health, public security, social security and environment protection be enhanced.

Reform in fiscal expenditure management and a separate management of revenue and expenditure including institutional budget, distribution system of state treasuries and government purchases will be deepened to standardize financial administration and increase the efficiency of financial capital.

"Meanwhile, we will use financial leverage to improve macroeconomic control and adopt appropriate fiscal policies in accordance with changes in domestic and international economy to ensure a stable economic growth," Xiang said.

In addition, he said, functions of the fiscal policy should be transformed to meet changes in government functions and financial departments will further improve their management in accordance with laws and regulations.

According to the minister, in the last 13 years since the Fourth Plenum of 13th CPC Central Committee, the central government has taken a series of adequate financial policies and carried out reforms in the financial revenue system, contributing to the fastest and most steady revenue growth in the history of the country.

In 2001, state financial revenue reached 1,638.6 billion yuan, 4.6 times more than that in 1990.

The past 13 years has also been an important period which witnessed the establishment of a fiscal system that plays a major role in the state's macroeconomic control, he said.

Macroeconomic control measures featuring a proactive fiscal policy combined with an adequate monetary policy since 1998 have ensured the Chinese economy to grow by seven to eight percent yearly. The policies have helped speed up construction of a numberof major infrastructure projects, readjust the economic structure and improve people's living standards, Xiang added.

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