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

The main policies regarding expenditures in 2017 are as follows:

-- Education

From the spring semester, we will introduce a unified policy whereby Chinese students receiving compulsory education are exempted from paying tuition and fees and paying for textbooks and a subsidy will be provided for the living expenses of students from families with financial difficulties. We will also ensure that the funds for these exemptions and subsidies as well as for the public funding benchmark per student are transferred if students change schools. We will continue to provide funding for improving conditions at badly built or poorly operated schools and other initiatives and for addressing the prominent problems in developing rural compulsory education. We will continue to implement the action plan for preschool education. We will provide financial support for infrastructure improvement for modern vocational education, integration between vocational education and industry, and cooperation between colleges and businesses. We will increase government grants for PhD candidates. We will ensure proper implementation of the budgetary appropriation system for central government institutions of higher learning so that efforts are coordinated to develop world-class universities and disciplines. We will provide further funding for moves to combat poverty through developing education with the focus on poor areas and populations.

-- Science and technology

We will give more financial support to basic research, research on cutting-edge technologies, research for the public benefit, and research and development for major generic key technologies. We will strengthen work to ensure stable financial support for public benefit research institutes (centers) and make funds available to facilitate the reform and development of research institutions and promote the open sharing of scientific and technological resources. We will finance efforts to further advance the establishment of a number of national laboratories in important fields of innovation and implement major science and technology projects. We will provide support to the launch of the Programs for Technological Innovation 2030.

-- Social security and employment

We will increase basic pension payments for retirees as appropriate and establish a mechanism for making reasonable adjustments to basic pensions. We will take steady steps to reform the basic old-age insurance system and expand its coverage. On the basis of progress in all related reform work, we will establish a central regulation system for basic old-age insurance funds. We will also formulate a plan for the transfer of a portion of state capital into social security funds. We will strengthen management over basic pension fund revenue and expenditures, and take effective measures to guard against payment risks.

We will step up the coordination of resources for social assistance and carefully determine the most appropriate subsistence allowances for Chinese citizens. We will improve our policies for providing assistance to people living in extreme poverty. We will strengthen work to secure the welfare of children living in difficult circumstances and ensure care and protection for children remaining in rural areas while their parents work away. We will strengthen financial support for programs that benefit people with disabilities.

We will adjust subsidies and living allowances for entitled groups at an appropriate time. Well-regulated trials will be carried out to establish long-term care insurance schemes. We will implement more proactive employment policies, improving our policies and measures for promoting employment and startups and doing more to help key groups find employment. We will conduct research on developing a system for life-long vocational skills training.

-- Health care

We will improve the mechanisms to ensure stable and sustainable funding for basic medical insurance and to adjust reimbursement rates for medical expenses, uphold the principle that benefit levels must be appropriate, and give particular weight to protection against major diseases. We will increase both annual government subsidies and personal contributions for basic health insurance for rural and non-working urban residents by 30 yuan, bringing the total up to 180 and 450 yuan a year per person, respectively. We will bring basic medical insurance funds under budgetary management and roll out reforms nationwide to the way medical payouts are made, using predominantly payouts according to the type of illness plus multiple other methods, and work to curb any unreasonable growth in medical costs. We will help carry out comprehensive reforms in public hospitals nationwide and improve the operating systems of community-level medical and healthcare institutions. We will raise the basic annual per capita government subsidies for public health services from 45 to 50 yuan.We will support the law-based development of traditional Chinese medicine. Having adopted the policy of allowing all couples to have two children, we will strengthen our maternity medical and healthcare services.

-- Poverty alleviation

The central government will allocate 86.1 billion yuan to subsidize local poverty reduction, an increase of 20 billion yuan, or 30.3 percent over last year. The funds will be used to support implementation of the fundamental strategy of targeted poverty reduction. We will coordinate the use of funds allocated to fields including agriculture, education, social security, and health care that are earmarked for poverty alleviation; further boost investment in the fight against poverty; and ensure that government investment plays a principal and guiding role in poverty reduction through development. We will speed up work to improve the infrastructure and basic public services in poor areas and step up support for reducing poverty by developing local industries, promoting education, and improving health standards. The integration of different rural development funds will be piloted in poor counties throughout the country. We will carry out inspections on the use of funds for poverty reduction.

-- Agriculture, forestry, and water conservation 

We will implement the reform plan for building an agricultural subsidy system geared toward ecological conservation, improve our system for subsidizing agriculture, ensure subsidy policies are more precise and better targeted, and boost the development of new industries and new forms of business in agriculture.

We will take constructive, steady steps to reform the pricing mechanism and the purchase and storage systems for grain and other important agricultural products; and we will continue and improve the minimum purchase price policy for rice and wheat, making reasonable adjustments to these prices, to enable reasonable parity between prices. We will make sure the reform of the corn purchase and storage system is carried out effectively, and will improve the system for subsidizing corn production. We will work to reduce excess stockpiles of policy-supported grain and cotton. We will adjust and improve the guaranteed base price policy for cotton and improve the way in which the subsidy for cotton production is granted. We will also adjust the guaranteed base price policy for soybeans. We will improve the mechanism for subsidizing major grain-producing areas and work to better utilize risk funds for grain.

We will increase food crop production based on farmland management and the application of technology, develop high-efficiency water-saving irrigation, and significantly scale up the development of high-grade farmland and land improvement. We will continue support for trials to restore cultivated land contaminated by heavy metals and adjust the production mix of agricultural products, and will expand the coverage of work to deal comprehensively with the over-abstraction of groundwater in north China.

We will step up support for post-disaster water conservancy construction in areas in need of attention. We will move forward with adjusting the production mix of food, cash, and fodder crops, and facilitate the development of appropriately scaled-up agricultural operations. We will move faster to make progress in the development and operation of an agricultural credit guaranty system at and below the provincial level. We will support forest protection, management, and cultivation, and step up support for afforestation and forest improvement efforts.We will improve the dynamic mechanism for adjusting compensation for forest management and conservation efforts that produce a positive ecological impact. We will support wetland protection and restoration efforts to encourage the resumption of wetland growth. We will deepen comprehensive reform in rural areas, move ahead with reforms in state farms, farms on reclaimed land, state forestry farms, forestry areas, and rural supply and marketing cooperatives, and develop and strengthen collective village enterprises.

-- Ecological conservation and environmental protection

We will ensure the support is there for fighting the battle against air, water, and soil pollution. We will provide government awards or subsidies to key regions for efforts to prevent and control air pollution caused by the use of coal or other factors. We will support the prevention and control of water pollution in key water basins and conduct surveys on soil pollution in order to strengthen the prevention and control of water and soil pollution. We will increase transfer payments for key ecological zones. We will act when appropriate to launch the second set of trial projects under the initiative to protect and restore mountain, water, forest and farmland ecosystems. We will fully implement a new round of subsidy and reward policies for grassland ecological conservation, support the new round of initiatives to turn marginal farmland into forest or grassland, expand the coverage of these initiatives, and realize coverage of protective policies for all natural forests. We will move forward with royalty reform for mineral resources and the establishment of a mechanism of intra-river basin compensation for ecological conservation. We will drive the expansion of pilot projects for developing a cap-and-trade system for emissions. We will support trials for the national park system.

We will continue to provide new-energy vehicle subsidies while raising the technological threshold for them and improving the way they are provided. We will ensure thorough implementation of the initiative to demonstrate the integration of fiscal policies for energy conservation and emission reductions. We will support the exploitation and utilization of clean energy resources such as coal seam gas, shale gas, and hydropower in rural areas, as well as the move to improve the quality of refined oil products. We will adjust the mechanism for subsidizing the use of renewable energy for electricity generation. We will also promote the development of a circular economy and clean production. We will give further support for comprehensive measures to address prominent environmental problems in rural areas.

-- Government housing support

We will provide strong support for the rebuilding of housing in rundown urban areas, and continue to promote the development of public rental housing and other government-subsidized housing as well as supporting infrastructure development. We will improve the way people displaced by rebuilding initiatives are helped to relocate and the way public rental housing is allocated, and push to see cities with large housing inventory increase the proportion of people receiving monetary housing compensation rather than housing. We will continue to make progress in renovating dilapidated rural housing, and central government subsidy funds will be used primarily for rebuilding unsafe housing for people eligible for subsistence allowances, for individuals who live at home in rural areas in extreme poverty and receive basic assistance, for the families of people with disabilities affected by poverty, and for households registered as living under the poverty line. Subsidies will also be appropriately increased.

-- Culture and sports

We will support local governments in their implementation of the national standards to guide the provision of basic public cultural services. We will strengthen support for the protection and proper use of cultural relics, and support the implementation of the initiative to develop and pass on China's fine cultural traditions. We will support efforts topromote the creation and production of works of literature and art and share Chinese culture with the outside world. We will increase the level of coordination between investments, resources, and policies for nonprofit cultural institutions and for-profit cultural enterprises, working to form a systematic and comprehensive fiscal policy system for the cultural sector. We will also improve the public sports facilities throughout the country and diversify the supply of services in the sports sector.

-- National defense

We will support efforts to deepen the reform of national defense and the armed forces, with the aim of building a solid national defense and strong armed forces that are commensurate with China's international standing and are suited to our national security and development interests. We will ensure that adequate funds are available to promote further military-civilian development.

-- Fiscal operations and safeguards for basic living standards in regions with acute financial difficulties

We will continue to increase short-term financial subsidies, and coordinate transfer payments to local governments including those for awards and subsidies for implementing the mechanism to ensure the basic financial capacity of county-level governments. We will intensify support to regions that are highly dependent on resources or energy and regions facing fiscal difficulties, and will bolster the safeguards that ensure basic needs are met. We will continue to increase transfer payments to old revolutionary bases, ethnic minority areas, and border areas.

-- Central investment in infrastructure

The central government will earmark 507.6 billion yuan for investment in infrastructure. The expenditure structure will be further improved, with a reduction in subsidizing small and miscellaneous projects, and a focus on poverty alleviation achieved by helping people living in inhospitable areas to relocate, major water conservancy projects and post-disaster water conservancy reconstruction, the improvement of city drainage facilities, a new round of work to upgrade rural power grids, railway construction in the central and western regions, and the rebuilding of rundown urban areas.

-- Cuts in general expenditures

Central departments will take the lead in tightening their belts, with major adjustments and reductions being made to the central government's regular expenditures. This will include the following.

First, we will continue to strictly limit the budget for spending on official overseas visits, official vehicles, and official hospitality in line with the principle that there should only be cuts, and no increases, to such spending. We will reduce expenditures related to meetings, training, publicity, consultation, "soft" research projects, and enterprise-related subsidies.

Second, expenditures for projects where there is some flexibility and for non-key projects will be cut by a margin not lower than 5 percent.

Third, budgetary appropriations will no longer be provided for projects whose policy goals have already been achieved, and new budgets are required for projects for which the environment for implementation has changed.

At the same time, we will require and guide local governments to ensure their related work, including reducing their general expenditures, is carried out to good effect, and take a firm stand against extravagance, waste, and unrestrained spending.