Chinese gov´t budget earmarks more money for rural areas

cctv.com 03-06-2004 13:50

China is forecasting a budget deficit of 319.8 billion yuan, or some 38.6 billion US dollars, for 2004. The government says the deficit will be covered by the issue of more treasury bonds this year. And the money raised from the issuance of new economic stimulus bonds will be used for boosting economic development and public services in rural areas. Chinese Finance Minister Jin Renqing outlined these measures today (Saturday) while making his budget report to the ongoing NPC session in Beijing.

In his report on the budget to the NPC session, Finance Minister Jin Renqing predicted central government expenditures of more than 1.70 trillion yuan, and revenues of more than 1.38 trillion yuan for 2004.

The new deficit of 319.8 billion yuan for 2004 is less than three percent of last year's gross domestic product. This is within the range viewed as safe by economists. And it is the first year since 1998 that the budget deficit has not grown.

The new deficit will be covered by the issue of more than 700 billion yuan in treasury bonds. The bonds will also help repay old T-bonds that are due. They are separate from special economic stimulus bonds, which Premier Wen Jiabao said on Friday would be trimmed by 20 percent to 110 billion yuan in 2004.

Finance Minister Jin Renqing said that the money raised from issuing special stimulus bonds will be used for addressing the widening urban-rural income gap. And it will also go toward improving basic public services in rural areas.

Chinese Minister of Finance Jin Renqing said:"In 2004, 95.5 billion yuan will be earmarked for education, health care, science and technology, and culture. That represents an increase of 10 billion over the previous year. The majority of the money will be used for rural areas."

This marks a major policy shift from government investment once spent mostly on public infrastructure projects like roads.

The central government is planning to pump up investment in rural areas by some 30 billion yuan, or more than 20 percent. And it is planning to dole out an additional 10 billion yuan in direct subsidies to halt a slide in grain output. It also expects to phase out agricultural taxes in five years.

The focus on rural development will be on improving health care, education and other public services in rural areas. This is in line with Premier Wen Jiabao's call for more balanced development.

In his report, Finance Minister Jin Renqing also proposed a 11.6-percent increase in the defense budget. The defense budget will be increased by more than 21 billion yuan, to about 207 billion yuan. The goal is to improve the defensive combat readiness of the armed forces, and to raise the salaries of those serving in the army.

Editor:Zheng  Source:CCTV.com