(4) A total of 50 billion yuan is projected for the reserve funds, which is consistent with the budgeted figure for 2016. During the course of implementation, the reserve funds will be counted as central government expenditures or transfer payments to local governments according to conditions.

Revenue in local governments' general public budgets is projected to reach 9.0018 trillion yuan, up 6 percent from last year. Adding in the 6.565 trillion yuan in tax rebates and transfer payments from the central government and the 80 billion yuan transferred from other local sources, this revenue is expected to total 15.6468 trillion yuan. Expenditures in local governments' general public budgets are projected to be 16.4768 trillion yuan, an increase of 6.2 percent over the actual figure for 2016 after allowing for utilized carryover and surplus funds from last year and funds transferred from other sources. This leaves a deficit of 830 billion yuan, an increase of 50 billion yuan. Local governments will make up for this deficit through the issuance of general bonds. The ceiling for the outstanding balance of local government general bonds will be 11.548922 trillion yuan.

Revenue in the general public budgets of both the central and local governments is projected to amount to 16.863 trillion yuan, up 5 percent. Adding in the 243.3 billion yuan transferred from other sources, this revenue is expected to total 17.1063 trillion yuan. Government expenditures in China are budgeted at 19.4863 trillion yuan, an increase of 6.5 percent over the actual figure for 2016 after allowing for local governments' utilized carryover and surplus funds from last year and funds transferred from other sources. This leaves a deficit of 2.38 trillion yuan, an increase of 200 billion yuan over 2016.

The above figures for budgeted revenue and expenditures for 2017 also take into account revenue into and expenditures through government-managed fund budgets that have been transferred into general public budgets: as of January 1, 2017, in order to increase coordination in the use of government funds, the revenue into and expenditures through three government-managed funds-fees for the compensated use of additional land designated for construction projects, South-to-North Water Diversion Project funds, and special use revenue turned over by tobacco companies-have been transferred into general public budgets. While we have reduced budgetary revenue and expenditures for government-managed funds, we have made corresponding increases to the projected revenue and expenditure figures for the 2017 general public budgets as well as to the revenue and expenditure baseline figures for 2016.

2) Budgets for government-managed funds

Revenue into central government-managed funds is projected to reach 370.649 billion yuan, up 3.2 percent. Adding in the 29.85 billion yuan carried forward from last year, revenue into central government-managed funds will total 400.499 billion yuan. Expenditures from central government-managed funds are expected to be 400.499 billion yuan, up 19.2 percent, which is mainly due to the increased use of funds carried forward from last year. This figure consists of 288.114 billion yuan in central government expenditures, up 14.5 percent, and 112.385 billion yuan in transfer payments to local governments, up 33 percent.

Figure 2

Projected Revenue and Expenditures in the Central Government's General Public Budget for 2017

Revenue into local government-managed funds is projected to be 4.346817 trillion yuan, up 3.6 percent. This figure includes 3.856862 trillion yuan in proceeds from selling state-owned land-use rights, up 4.3 percent. Adding in the 112.385 billion yuan in transfer payments from central government-managed funds and the 800 billion yuan of revenue generated from special local government debt, revenue into local government-managed funds is projected to total 5.259202 trillion yuan. Expenditures through local government-managed funds are expected to total 5.259202 trillion yuan. This includes 4.646872 trillion yuan funded using proceeds from selling state-owned land-use rights, up 23.4 percent. The balance of outstanding special debt of local governments is projected to be no more than 7.268508 trillion yuan.

Revenue into the government-managed funds in both central and local government budgets is projected to be 4.717466 trillion yuan, an increase of 3.6 percent. Adding in the 29.85 billion yuan carried forward from last year and the 800 billion yuan of revenue generated from special local government debt, this revenue is projected to be 5.547316 trillion yuan. Expenditures through these funds are projected to reach 5.547316 trillion yuan, up 21.3 percent.

It should be noted that in 2017 the revenue and expenditures for three items, including fees for the compensated use of additional land designated for construction projects, will be transferred from government-managed fund budgets into general public budgets. We have accordingly deducted the figures for 2016 so that the level of growth for these items is calculated on a comparable basis.

3) Budgets for state capital operations

In 2017, we will strive to further refine the budgeting system for state capital operations and improve the structure of expenditures. The proportion of profits from the operations of central government enterprises that should be turned over to the central government will be kept unchanged for now, and the proportion of funds allocated from the budgets of the state capital operations of the central government to its general public budget will be raised from 19 to 22 percent. Budgetary expenditures through central government state capital operations will be primarily used to promote supply-side structural reform, address the longstanding problems of SOEs, and deepen SOE reform.

Budgetary revenue from the state capital operations of the central government is projected to be 129 billion yuan, down 9.8 percent. This decrease comes primarily from lower than expected enterprise profits in the petroleum, petrochemical, and electricity industries. Adding in the 12.803 billion yuan carried forward from last year, budgetary revenue from central government state capital operations is projected to total 141.803 billion yuan. Budgetary expenditures through these operations are expected to be 116.103 billion yuan, down 20 percent, which is mainly due to a reduction in the use of funds carried forward from last year. Of this, 104.703 billion yuan is to be spent at the central level, an increase of 11.7 percent, and 11.4 billion yuan is to be transferred to local governments, a decrease of 77.8 percent. A projected 25.7 billion yuan will be transferred into the general public budget, up 4.5 percent.

Budgetary revenue from the state capital operations of local governments is projected to be 104.83 billion yuan, down 10.5 percent from last year. Adding in the 11.4 billion yuan of transfer payments from the budgets of central government state capital operations, budgetary revenue into local government state capital operations is projected to total 116.23 billion yuan. Budgetary expenditures through local government state capital operations are estimated to be 91.43 billion yuan, down 25.9 percent. A projected 24.8 billion yuan is to be allocated to local government general public budgets.

Revenue in the state capital operation budgets of both the central and local governments is projected to be 233.83 billion yuan, down 10.1 percent. Adding in the 12.803 billion yuan carried over from last year, this revenue is projected to total 246.633 billion yuan. Budgetary expenditures through state capital operations of both the central and local governments are expected to be 196.133 billion yuan, down 9.7 percent. A projected 50.5 billion yuan will be transferred into general public budgets.