During a recent press conference,
leaders of relevant departments under the State Council
answered questions posed by Chinese and foreign reporters on
China's fiscal policy and the effort made by the country to
narrow urban-rural and east-west gaps.
Question:The proactive fiscal
policy is a special measure adopted by China in a special
economic environment. China plans to issue 140 billion yuan
of treasury bonds this year. Does this suggest that the
proactive fiscal policy is fading out?
Answer:The proactive fiscal
policy, in essence, is an expansive fiscal policy, which
aims to stimulate investment and consumption demand through
the means of increasing financial expenditure. A total of
660 billion yuan of long-term treasury bonds have been
issued over the past five years. These funds, pooled into
construction, have driven up both investment and consumption
demand. While playing a key role in maintaining the steady
and fast development of the national economy, the practice
also has widened the gap between financial revenue and
expenditures.
At present, the problem of
inadequate domestic demand still exists. Given this, the
continuous implementation of the proactive fiscal policy and
the prudent monetary policy will help enlarge domestic
demand. Last year, 150 billion yuan of treasury bonds were
issued, of which 10 billion yuan was transferred to this
year's account. Hence, the amount issued this year roughly
equals that of last year. The reduced amount for this year
does not suggest that the proactive fiscal policy is fading
out.
Q:Chiha~has implemented the proactive fiscal policy for five
years, and last year its investment in fixed assets rose by
16.1 percent on the previous year. Why is the country still
haunted by the problem of inadequate demand?
A:Last year, the
growth of fixed asset investment was fairly high when
compared with that in previous years, hitting 16.1 percent.
However, we need to study many problems related to
investment demand, such as the main body of investment,
which is important. Enterprises should become main
investors. Although the investment capacity of state-owned
enterprises has been on the rise, the mechanism for the
continuous growth of investment still remains incomplete.
Furthermore, the potential of private and individual
investment should be tapped. Hence, a process will be
involved to complete the mechanism for the continuous growth
of investment. At present, the
problem of inadequate consumption demand is glaring. The
difficulties in increasing the income of farmers, in
particular, adversely affect the overall expansion of
consumption demand. Q:Will all the treasury bonds issued or to be
issued be used in state construction? Are there cases of
using the treasury bonds for other purposes or corruption?
Are there any supervision and control measures in this
respect?
A:The construction treasury
bonds are crucial. Responsible departments under the State
Council and various localities have all attached great
importance to the proper use of the fund. While carefully
designing and managing the treasury bond-funded projects,
various localities have established strict responsibility
systems regarding the use of treasury bonds. Meanwhile,
planning, financial, supervision and auditing departments
have intensified supervision, examination and auditing of
treasury bond-funded projects. In general, treasury bonds
are properly used in construction. However, cases of
diverting construction treasury bonds to other purposes did
have occurred in some localities. Though small in number,
they were seriously dealt with as soon as they were
discovered.
Q:What effort has China made
to narrow the gap between urban and rural areas and between
eastern and western regions?
A:Narrowing the gap between
urban and rural areas is an arduous task, as well as a key
point, in the effort to build an all-round well-off society
in China.
Last year, the per-capita
real income of China's urban residents rose by 13.4 percent,
while that of rural residents grew by only 4.8 percent. The
big gap roused great concern among both the Chinese and
foreign media. Agriculture and the rural economy,
particularly the issue of increasing farmers' incomes, are
focal points among the top priorities in China's
socioeconomic development. As the gap between China's urban
and rural areas has been growing over a long period, to
narrow the gap will involve a fairly long process.
This year, efforts will be made in the
following four aspects: --Expediting the
strategic restructuring of the rural economy and the
readjusment of the mix of farm produce. This aims to produce
quality products needed by the market.
--Speeding up rural reform, particularly the
tax-to-fee reform. The reform was launched in 20 provinces,
municipalities and autonomous regions last year, and the
experiment will extend to all parts of the country this
year. This is the main method to reduce the burden of
farmers. Simultaneously, the reform of grain and cotton
distribution systems will be carded out in depth.
--Strengthening rural infrastructure
construction. This aims to improve the production and living
conditions of farmers. --Continuing to
advance the urbanization process. This aims to create
conditions for the rational flow of surplus rural laborers
to cities and towns. In addition,
intensified efforts will be pooled to solve the problem of
feeding and clothing poor farmers through
development-oriented poverty relief and work-relief
programs.
Since the introduction of
the west development strategy, the gap between economic
growth of China's eastern and western regions has been
narrowed, from 1.5 percentage points in 1999 to 0.6
percentage, point in 2002.
Over the past three years, China has increased
investment in the western region's infrastructure
construction and ecological and environmental conservation,
which has expedited the economic development in the western
region. Fixed asset investment in the region has also been
quickened. Between 2000-2002, the western region's GDP rose
by 9 percent annually, a rise of 1.8 percentage points on
1999. Fixed asset investment increased by 18.8 percent
annually during this period, up 6 percentage points on the
national average. Owing to historical and social reasons, as
well as to its natural conditions and geographical location,
the western region falls fairly far behind the eastern area
in terms of economic development, with its per-capita GDP
equaling only 40 percent of the latter's. The implementation
of the west development strategy aims to narrow regional
gaps and achieve the coordinated development of various
regions.
To narrow the economic gap
between eastern and western regions calls for long-term
efforts. Over the past three years, economic development in
the western region has been speeded up gradually, chiefly
relying on the Central Government's capital input. The
region's capacity for self-development is still weak. Along
with the optimization of its investment environment and the
influx of domestic and overseas capital, the western region
will further speed up its development, which will help
narrow the gap between eastern and western regions step by step.
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