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Minister Explains Slight Drop in Revenue Growth

Total revenue in the draft central and local budgets for 2001 is 1.47602 trillion yuan (US$178.48 billion), up 10 percent over last year, representing a slight slowdown in the growth of China's revenue compared with that in recent years.

This was remarked by Xiang Huaicheng, minister of finance, in his Report on the Implementation of the Central and Local Budgets for 2000 and the Draft Central and Local Budgets for 2001 on Tuesday, the second day of the Fourth Session of the Ninth National People's Congress (NPC).

The minister explained the expected slowdown in government revenue growth with the following reasons:

First, there is some instability in world economic growth this year, and this will affect China's exports.

Second, import duties increased by a big margin in the past two years mainly because of a crackdown on smuggling and an extraordinary rise in imports, but this increase cannot be sustained in normal years. Moreover, a reduction in revenue is expected since China has decided to cut tariff rates in 2001.

Third, the large contributions from state-owned enterprises to state revenue in 2000 were mainly due to a recovery in their performance.

Fourth, securities market transactions are quite unpredictable, and the budgeted amount of revenue from the stamp tax on securities transactions cannot be set too high.

Fifth, a large increase in revenue in 2000 came from price hikes on the oil markets at home and abroad, but oil prices have been falling since the end of last year.

Xiang said that taking all these factors into consideration, " we have decided, according to the principle of handling matters in an active but prudent manner, that revenue in the central budget for 2001 would increase slightly faster than the rate of economic growth."

(Xinhua 03/06/2001)



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