Full text: Report on China's central, local budgets

4) Budgets for social security funds

In 2016, revenue into China's social security funds reached 4.827253 trillion yuan, representing 102.4 percent of the budgeted figure and an increase of 4.1 percent. This revenue includes 3.506586 trillion yuan from insurance premiums and 1.110434 trillion yuan from government subsidies. Expenditures from these funds amounted to 4.391894 trillion yuan, representing 100.9 percent of the budgeted figure and an increase of 12.3 percent. The social security fund surplus for 2016 was 435.359 billion yuan, which was rolled over to make the year-end balance 6.329467 trillion yuan.

In addition, in compliance with the State Council's requirement to strengthen overall coordination in the use of government funds, a number of items were transferred from local government-managed funds into local government general public budgets and the corresponding outstanding balance of special debt totaling 11.682 billion yuan and the ceiling for this balance were transferred to general debt, leaving the ceiling for local government debt unchanged.

4. Implementation of main policies regarding expenditures in 2016

-- Education

We established a unified benchmark for public funding per student in China's compulsory education schools. Eligible students from families with financial difficulties at regular senior secondary schools were exempted from tuition and miscellaneous fees. We funded improvements to basic conditions in more than 80,000 badly built or poorly operated schools providing compulsory education in poor areas. We established a funding system for secondary vocational schools based on student enrollment. We implemented a new budgetary appropriation system for institutions of higher learning directly under the central government. State financial assistance was granted to over 84 million students over the course of last year.

-- Scientific and technological innovation

We improved the structure of science and technology expenditures, giving high priority to funding science and technology activities for the public interest, and increasing funding for basic research. We finished improving central government plans, special programs, and funds for funding scientific and technological advancements. We improved the mechanism ensuring stable funding for the reform and development of research institutions. We funded both systematic pilot reforms focused on all-around innovation and the development of national innovation demonstration zones. We funded efforts to promote the transfer and commercialization of scientific and technological achievements.

-- Social security

Basic pension benefits for the retirees of enterprises, Party and government offices, and public institutions were increased by around 6.5 percent. We funded pilot reforms to develop at-home and community-based elderly care. Subsistence allowances for Chinese citizens were increased. We moved forward with the establishment of a sound system for providing assistance to people living in extreme poverty. We worked to ensure entitled groups received their benefits. Support was ensured for the proper settlement of demobilized military personnel. A system was put in place nationwide for granting living allowances to people with disabilities in financial difficulty and nursing subsidies to people with serious disabilities. We provided subsidies for social security programs and vocational training to encourage enterprises to employ those experiencing employment difficulties, to help workers improve their vocational skills, and to provide better public employment services.

-- Reform of the medical and health care system

Annual government subsidies for basic medical insurance for rural and non-working urban residents were increased from 380 to 420 yuan per person. Pilot reforms of urban public hospitals were expanded to 200 cities and reforms were carried out in all county-level public hospitals. We funded the standardized training of 190,000 resident physicians and the first batch of 5,000 assistant general practitioners. Per capita government spending on basic public health services was raised from 40 to 45 yuan per year. We continued to fund major public health service projects to, among other things, prevent and control diseases and provide maternal and child care.

-- Modern agriculture

We provided direct subsidies to grain growers, subsidies for purchasing superior crop varieties, and general subsidies for the purchase of agricultural supplies nationwide. We subsidized trials to shift from growing grain crops to producing soybeans on 333,300 hectares of farmland and from growing grain crops to cultivating feed crops on 400,000 hectares of cultivated land. We also subsidized trials in using systems of crop rotation and fallow land. More funds were made available for trials to restore cultivated land contaminated by heavy metals and adjust the agricultural production mix, as well as trials to deal comprehensively with the over-abstraction of groundwater in more areas.

We deepened reform of the purchase and storage system for important agricultural products. The policy on the temporary purchasing and stockpiling of corn was scrapped in favor of a new mechanism for purchasing corn at market prices plus subsidies, and a system was established for subsidizing corn production. We adopted a broad range of measures to reduce excess policy-supported stockpiles of grain, cotton, and edible oil. We provided support for the initiatives to foster new agricultural operational systems. Thanks to government funding, the area of cropland covered by efficient water-saving irrigation was increased by 1.33 million hectares, and efforts toward comprehensive agricultural development saw the addition of 1.87 million hectares of high-grade cropland. We financed the extension of trials to integrate the development of primary, secondary, and tertiary industries to more rural areas, and to support the development of collective village enterprises. Around 300,000 village-level public works projects launched on the basis of decision making by villagers were completed using government awards and subsidies.

-- Ecological conservation

Funds for the prevention and control of soil pollution were launched, and funding was made available for implementing the action plan for addressing soil pollution. We allocated more funds for addressing air pollution, with the focus on tackling key areas such as pollution from coal burning and industrial pollution. We continued to develop a reserve of projects for addressing water pollution, making additional funding available for the prevention and control of water pollution in key areas and major drainage basins. We launched a new round of policies to subsidize and reward grassland ecological conservation, covering 254.07 million hectares of grassland. We provided financial support for implementation of a new round of initiatives to turn a further 1.01 million hectares of marginal farmland into forest or grassland. We funded the implementation of the protective policies for all natural forests nationwide. We made funding available for four pilot projects for ecological conservation and restoration including the Beijing-Tianjin-Hebei Water Source Conservation Area in Hebei Province. Funding was also made available for the establishment of mechanisms for trans-regional and intra-watershed compensation for ecological conservation efforts in four drainage basins including the Jiuzhoujiang River, and for action in the Blue Bay environmental improvement initiative in 18 cities.

-- Government support for basic housing

We funded the rebuilding of 6.06 million housing units in rundown urban areas and 3.14 million dilapidated rural houses, meeting the targets for the year for both programs. The proportion of people displaced through such programs who received monetary housing compensation rather than housing reached 48.5 percent, up 18.6 percentage points over the previous year.

-- Reform and development in the cultural sector

We subsidized efforts to keep 49,871 public cultural facilities free to the public and make 1,260 public sports complexes free or inexpensive to public users. We also funded 1,791 programs to protect key national cultural relics. Support was given to encourage the creation and production of cultural products, facilitate cultural exchange with foreign countries, share Chinese culture globally, reform state-owned cultural enterprises directly under the central government, and promote the coordinated development of cultural programs and industries.

For a more detailed account of budget execution related to the above items, please refer to the Report on the Execution of the 2016 Budgets of the People's Republic of China and Its 2017 Draft Budgets in Chinese.

Overall, our fiscal operations in 2016 remained stable and achievements were made in the reform and development of public finance, which gave impetus to steady and sound economic and social development. We owe these achievements to the leadership of the CPC Central Committee and the State Council; to the oversight and guidance of the NPC, deputies to the NPC, the CPPCC National Committee and its members; and to the joint efforts of all regions, government departments, and the Chinese people.

On the other hand, we are soberly aware of the following main difficulties and problems in our fiscal operations and finance work.

-- Within the context of considerable downward pressure on China's economy, there is a lack of impetus for government revenue growth and the growth prospects of local government revenue are mixed; imbalances in government revenue and expenditures are becoming more pronounced in some regions that are resource-dependent or whose traditional industries have a large share in their respective economies; and some township-level governments are having financial difficulty in keeping themselves operating and meeting people's basic needs.

-- The structure of budgetary spending is not balanced, with spending on some items constantly increasing.