Chinese Govt Ready to Meet Fiscal Challenge: Premier

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Last updated at: (Beijing Time) Wednesday, August 13, 2003

Chinese Govt Ready to Meet Fiscal Challenge: Premier

The Chinese government will continue its crackdown on smuggling and tax evasion to increase fiscal revenues as it prepares to meet fiscal challenges later in the year.

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The Chinese government will continue its crackdown on smuggling and tax evasion to increase fiscal revenues as it prepares to meet fiscal challenges later in the year.

Premier Wen Jiabao said Tuesday that China had maintained a healthy balance between revenue and spending in the first half of this year, but difficulties remained.

Premier Wen told a meeting of the Tariff Policy Commission of the State Council, which opened here Tuesday afternoon, that the government would make every effort to increase the fiscal revenue and reduce spending through cracking down upon smuggling and tax evasion as well as improving management on fiscal budget.

The Ministry of Finance said on Aug. 3 that China was likely tosee an increase in government spending in the latter half of this year while the revenue growth could slow down.

The ministry attributed the predicted spending increase to the impact of the severe acute respiratory syndrome (SARS) disease, natural adversities like prolonged dry spells in some parts of central-south and south China and severe floods that hit east and northeast China and the ongoing reform of the social insurance system.

Fiscal revenue reached a year-on-year growth of 20 percent in the second quarter this year, 16.7 percentage points down from growth in the first quarter, while the growth of spending stood at20.6 percent, up 9.7 percentage points, said the ministry source.

Wen said the government would guarantee the budget in disaster relief, agriculture, education, social insurance and re-employment projects while increasing the spending on public health care service.

The Chinese premier vowed to keep the fiscal deficit of central government under the budget and further unfold the reform in the financial sector.

China's fiscal revenue in the first half of this year was 1,095.5 billion yuan (132 billion US dollars), up 27.4 percent over the same time last year. The revenue was 128.9 billion yuan (15.5 billion US dollars) more than the fiscal expenditure, according to the National Bureau of Statistics (NBS).

The country will try it utmost to maintain the tax revenue while it keeps cutting the tariff in line with the commitment to the World Trade Organization (WTO), Premier Wen said.

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