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Govt urged to spend extra revenue on livelihood

(Xinhua)
Updated: 2007-12-17 17:33

BEIJING-- A senior Chinese legislator has urged the government to use the extra fiscal revenue beyond this year's budget to finance public services, improve people's livelihood and reduce the fiscal deficit.

"The government must make a special budget for these extra money ranging from 700 billion (US$95 billion) to 800 billion yuan and implement it upon the legislature's approval, " said Jiang Zhenghua, deputy chairman of the National People's Congress Standing Committee.

The government could take advantage of drastic rises in fiscal revenue to increase the capital input in public services such as social securities, reemployment, medicare, sanitation and housing subsidies and bankroll primary education in rural areas, Jiang was quoted as saying by Monday's China Securities Journal.

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Jia Kang, director of the Research Institute for Fiscal Science under the Ministry of Finance, predicted earlier this month that this year's fiscal revenue might reach 5.1 trillion yuan, up 1.2 trillion, or 31 percent over the previous year.

The 2007 fiscal revenue was budgeted at 4.4 trillion yuan (US$598 billion) compared with an expenditure of 4.65 trillion yuan (US$631 billion).

The government has adopted a prudent fiscal policy since 2003, with the country's fiscal deficit rate continuously falling from 2.9 percent in 2003 to nearly 1.1 percent this year. Meanwhile, the country's national fiscal revenue more than doubled from two trillion yuan in 2003 to four trillion yuan in 2006.

This year, the central government channeled 31.276 billion yuan into health expenditures, up 86.8 percent over the previous year. A new rural cooperative medical insurance system, aimed at helping farmers fund visits to the doctor, will expand to more than 80 percent of the nation's counties.

In addition, the government put 223.5 billion yuan into compulsory education in the rural areas this year, up 39.5 percent from last year. All children will be entitled to 9-year free compulsory education in rural China by the end of 2007.

The Chinese Ministry of Finance (MOF) decided to issue 1.55 trillion yuan of special T-bond this June, but officials with MOF said the issue did not mean an increase in fiscal deficit because the money would be used for the funding of the China Investment Corporation, aimed at increasing revenue.

"More promising large-scale enterprises will be encouraged to list on the capital market," Jiang, the deputy chairman. He added, " The capital market system construction will be advanced and the financial channels of enterprises will be expanded to prevent big fluctuations in the stock market."



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