Steady growth for economy

Source:

03-05-2006 12:21

The report on the implementation of the central and local budget plans, as well as the report on the country's macro-economic performance, was presented to the 4th plenary session of the 10th National People's Congress. The reports find that China's economy is maintaining its steady growth. In 2005, the country's fiscal revenue exceeded 3 trillion yuan, and the GDP grew at a rate of nearly 10 percent.

The Ministry of Finance says the 2005 budget was carried out well by the central and local governments. The ministry's report says that in 2005, the national fiscal revenue exceeded 3 trillion yuan, or some 375-billion US dollars. That's an impressive increase of 19.8 percent, or more than 62 billion US dollars, from the previous year. The budget deficit accounts for 1.6 percent of China's total GDP, below the level approved by the third session of the 10th National People's Congress.

The Ministry says in 2005, the central government continued carrying out a prudent fiscal policy and increased its financial support to the country's vast rural area. In the past year, the central government spent nearly 300 billion yuan, or some 37.5 billion US dollars in promoting agricultural development and helping increase farmers' income. That's an increase of over 13 percent compared to the 2004 level.

Social security was another focus of the central government's 2005 budget. More than 360 billion yuan, or some 43 billion US dollars, was spent on providing reemployment and social security guarantees. This was an over 17 percent increase compared to the 2004 level.

The central government also continued furthering fiscal and tax reforms in 2005. It improved the trial plan for the value-added-tax reform and adjusted the individual income tax. These moves are helping to improve the socialist market economy.

The ministry's budget for 2006 will raise the central fiscal revenue to nearly 2 trillion yuan, or an increase of 11.7 percent, or over 250 billion US dollars. The revenue will be first used to strengthen the macro-economic control and ensure the stable growth of the national economy. It will also be used to increase financial support for the drive to build a new socialist countryside, and improve compulsory education in rural areas. In 2006, a trial reform will be carried out in 12 provinces, autonomous regions and municipalities to set up a free compulsory education funding guarantee system. In 2007, rural areas across country will enjoy free compulsory education.

The national economic performance in 2005 was also impressive. The State Development and Reform Commission says in its report that China's GDP has exceeded 18 trillion yuan, or more than 2.2 trillion US dollars. That's a 9.9 percent increase compared to the previous year. 2005 was another year of harvest. Grain output totaled 484 billion kilograms, 14.54 billion kilograms more than the previous year. In the meantime, China's overseas trade was prosperous. The total import and export volume exceeded 1.4 trillion US dollars, a sharp increase of over 23 percent over last year. The strong increase of exports enabled China to enjoy a surplus of more than 100 billion US dollars.

The Commission admits that a string of problems exist. First, it's still hard to sustain a steady increase in grain output and farmer incomes. Another problem is that the increase of fixed asset investment is still higher than a healthy level. Third, overproduction in the manufacturing sector is increasing the financial risks. And finally, the country is still faced with serious challenges in ensuring work safety.

The Commission also highlighted some major tasks of China's economic and social development plan for 2006.

First, the GDP growth rate should be maintained at around 8 percent.

Second, 9 million jobs should be created to control the unemployment rate, and keep it below 4.6 percent.

Third, the consumption price should be controlled under 3 percent.

Fourth, overseas trade volumed should be increased by 15 percent.

Fifth, the disposable income of urban and rural residents should both be increased by over 5 percent.

2005 CENTRAL BUDGET

The national fiscal revenue exceeded 3 trillion yuan, or some 375 billion US dollars, an increase of 19.8 percent, or more than 62 billion US dollars over the previous year.

The deficit of the central government budget accounts for 1.6 percent of China's total GDP, below the level approved of by the third session of the 10th National People's Congress.

2006 CENTRAL BUDGET PLAN

Central fiscal revenue should reach nearly 2 trillion yuan, or an increase of 11.7 percent of over 250 billion US dollars.

Strengthen the macro-economic control and ensure the stable growth of the national economy.

Increase financial support to build a new socialist countryside, and improve compulsory education in the rural area.

Trial reform will be carried out in 12 provinces, autonomous regions and municipalities to set up a free compulsory education funding guarantee system.

In 2007, rural areas in the whole country will enjoy free compulsory education.

CHINA'S NATIONAL ECONOMY PERFORMANCE IN 2005

China's GDP exceeded 18 trillion yuan, or more than 2.2 trillion US dollars, a 9.9 percent increase compared to the previous year's level.

The grain output totaled 484 billion kilograms, 14.54 billion kilograms more than the previous year.

The total import and export volume exceeded 1.4 trillion US dollars, a sharp increase of over 23 percent over last year.

China's overseas trade surplus is over 100 billion US dollars.

CHALLENGES FOR CHINA'S ECONOMY

It's still hard to sustain a steady increase of the grain output and farmer's income.

The increase of fixed asset investment is still too high.

Overproduction in the manufacturing sector is increasing the financial risks.

The country is still faced with serious challenges in ensuring work safety.

2006 TARGETS OF ECONOMIC AND SOCIAL DEVELOPMENT

The GDP growth rate should be maintained at around 8 percent.

9 million job opportunities should be created to keep the unemployment rate below 4.6 percent.

The consumption price should be controlled under 3 percent.

The overseas trade volume should be increased by 15 percent.

The disposable income of urban and rural residents should both be increased by over 5 percent.

Editor:Wang Ping