Report on the implementation of the central and local budgets for 2014 and on the central and local draft budgets for 2015 (14)

 (2) Budgets for government-managed funds

The revenue budgeted for government-managed funds is compiled by taking into account a comprehensive range of factors including the revenue base, price changes, and policy adjustments while basing these considerations on the implementation of the equivalent budget from the previous year. The expenditure budgeted for government-managed funds is compiled in accordance with the principles of arranging expenditures based on revenue, keeping a balance between total expenditure and total revenue, and using designated funds for their intended purposes.

The revenue of central government-managed funds will total 436.387 billion yuan, up 11.7%. Adding the 72.072 billion yuan carried forward from last year, in 2015, the total revenue of central government-managed funds will reach 508.459 billion yuan. The expenditure from central government-managed funds will also be 508.459 billion yuan, up 25.4%. This figure is comprised of 366.928 billion yuan of central government spending, up 27.2%, and 141.531 billion yuan in transfer payments made to local governments, up 20.9%.

 It is projected that the revenue of funds managed by local governments will total 4.450951 trillion yuan, down 4.7%. This figure includes 3.9452 trillion yuan from the sale of state-owned land-use rights, down 4.7%. Adding the 141.531 billion yuan in transfer payments from central government-managed funds, the projected total for the revenue of local government-managed funds is 4.592482 trillion yuan. Approval has been given by the State Council for special bonds to the total value of 100 billion yuan to be issued by local governments for the development of public-service programs that will yield a certain degree of revenue. The expenditure from local government-managed funds will total 4.692482 trillion yuan, up 2.6%. This figure includes 3.977877 trillion yuan of spending allocated from the proceeds of the sale of state-owned land-use rights, a decrease of 1.4%.

 When the central and local budgets are combined, the projected figure for the revenue of the central and local government-managed funds stands at 4.887338 trillion yuan, down 3.5%. Including the 72.072 billion yuan carried forward from the previous year and 100 billion yuan in special bonds issued by local governments, the projected total revenue of government-managed funds nationwide comes to 5.05941 trillion yuan, with the expenditure from these funds also budgeted to total 5.05941 trillion yuan, an increase of 4.1%.

 It should be noted that, following the incorporation of the revenue and expenditure of eleven government-managed funds, such as local education surcharge, into the general public budgets, there was a drop in the total budgetary revenue and expenditure of central and local government-managed funds in 2015. Due to this, we have lowered the base figures for 2014 accordingly, and can still calculate the increases on a comparable basis.

(3) Budgets for state capital operations

According to the scheme approved by the State Council for improving the government budgeting system, in 2015, we will take the following measures to improve the budgeting system for state capital operations.

The proportion of funds allocated from the central government’s state capital operations budget to the general public budget will be further increased.

The areas of spending from the central government’s state capital operations budget will be clearly delineated: apart from allocations for transferal into the general public budget or for replenishing social security funds, funds will be used primarily to cover expenditures for addressing longstanding problems of SOEs and their relevant reforms, injecting capital into SOEs, and providing them with policy-based subsidies.

Transfer payments to local governments made in the central government’s state capital operations budget will be used in supporting SOEs under the central government and enterprises decentralized after 1998 in the coal, non-ferrous metal, defense, and other industries in addressing their longstanding problems and supporting efforts in completing the reform of collectively owned businesses operated by SOEs.

Some state-owned financial enterprises under the central government will be brought into the scope covered by the state capital operations budget.

In 2015, the revenue from state capital operations of the central government is estimated to be 155 billion yuan, up 9.9% over the previous year. Adding the 14.398 billion yuan carried over from last year, the projected total for revenue from state capital operations of the central government is 169.398 billion yuan. Expenditure from the central government’s state capital operations budget will reach 169.398 billion yuan, up 19.4% over the previous year. Of this, 140.548 billion yuan is to be spent at the central level, including 23 billion yuan (an increase of 4.6 billion yuan over the previous year) to be allocated into the general public budget and spent on ensuring and improving people’s living standards; 52.7 billion yuan to be spent on addressing the longstanding problems of SOEs and related reforms; 53.6 billion yuan earmarked for capital injection; 8.8 billion yuan to be used as subsidies for policy-based losses; and 2.448 billion yuan to be used for other expenditures. Total funds earmarked for transfer payments to local governments is 28.85 billion yuan.

The revenue from state capital operations of local governments is projected to reach 71.312 billion yuan. Adding the 28.85 billion yuan of transfer payments from the central government’s state capital operations budget, the revenue in the budgets for local government state capital operations will total 100.162 billion yuan. Expenditure from the budgets for state capital operations of local governments is also projected to be 100.162 billion yuan.

Combining the central and local budgets, the projected total for national revenue from state capital operations is 226.312 billion yuan. Adding the 14.398 billion yuan carried over from the previous year, national revenue from state capital operations will total 240.71 billion yuan. The projected figure for national expenditure from the state capital operations budgets is also 240.71 billion yuan.