BEIJING, March 18 -- The following is the full text of the Report on the Implementation of the Central and Local Budgets for 2006 and on the Draft Central and Local Budgets for 2007, which was submitted for review on March 5 and approved on March 16by the Fifth Session of the Tenth National People's Congress:

REPORT ON THE IMPLEMENTATION OF THE CENTRAL AND LOCAL BUDGETSFOR 2006 AND ON THE DRAFT CENTRAL AND LOCAL BUDGETS FOR 2007

Fifth Session of the Tenth National People's Congress

March 5, 2007

Ministry of Finance

Fellow Deputies,

The Ministry of Finance has been entrusted by the State Council to report on the implementation of the central and local budgets for 2006 and on the draft central and local budgets for 2007 for your deliberation and approval at the Fifth Session of the Tenth National People's Congress (NPC), and also for comments and suggestions from the members of the National Committee of the Chinese People's Political Consultation Conference (CPPCC).

I. Implementation of the Central and Local Budgets for 2006

Under the firm leadership of the Central Committee of the Communist Party of China and the State Council, and guided by the Scientific Outlook on Development, all localities and departments in 2006 conscientiously followed the principles and policies set by the central authorities and relevant decisions and resolutions passed at the Fourth Session of the Tenth NPC. This resulted in an excellent beginning for the Eleventh Five-Year Plan period, great new achievements in development of the economy and all social programs, and further improvement in people's lives. The central and local budgets were also satisfactorily implemented.

National revenue reached 3.934362 trillion yuan (excluding revenue generated through debt, both here and below), up 769.433 billion yuan or 24.3% from 2005. Total revenue exceeded the budget target by 392.024 billion yuan, consisting of 254.247 billion yuan at the level of the central government and 137.777 billion yuan at the local level. National revenue totaled 3.873062 trillion yuan (not including the 61.3 billion yuan that was used to clear up longstanding arrears in export tax rebates in accordance with regulations), a year-on-year increase of 708.133 billion yuan or 22.4%. This was 330.724 billion yuan or 9.3% over the budget target. National expenditures amounted to 4.021316 trillion yuan, a year-on-year increase of 628.288 billion yuan or 18.5%, representing 104.8% of the budgeted figure.

The separate figures for the central and local budgets are as follows: Total revenue in the central budget came to 2.123231 trillion yuan (not including the 61.3 billion yuan that was used to clear up longstanding arrears in export tax rebates in accordance with regulations), an increase of 397.182 billion yuan or 23% over the figure for 2005. This amount was 196.027 billion yuan or 10.2% over the budgeted figure. It included 2.044977 trillion yuan collected by the central government, 390.124 billion yuan or 23.6% more than the amount for 2005 and 192.947 billion yuan or 10.4% over the budgeted figure. Total revenue turned over from the local budgets was 78.254 billion yuan, an increase of 7.058 billion yuan or 9.9% over the total for 2005. This was 3.08 billion yuan or 4.1% over the budget target. Total expenditures in the central budget amounted to 2.348226 trillion yuan, 322.227 billion yuan or 15.9% more than that for 2005, representing 105.7%of the budgeted figure. Total expenditures included 999.156 billion yuan incurred at the central government level, an in crease of 121.559 billion yuan or 13.9% over the amount for 2005, representing 104.9% of the budgeted figure. Expenditures for tax rebates and transfer payments for local governments totaled 1.34907 trillion yuan, 200.668 billion yuan or 17.5% more than the amount in 2005, representing 106.3% of the budgeted figure. Fifty billion yuan was set aside to establish a new central budget stability and regulation fund. The deficit in the central budget for 2006 was 274.995 billion yuan, 20.005 billion yuan less than the 295 billion yuan approved at the Fourth Session of the Tenth NPC, dropping to 1.3% of GDP. At the end of 2006 the outstanding national debt in the central budget was under the set limit of 3.538168 trillion yuan. Revenue from funds controlled by the central government amounted to 170.687 billion yuan and expenditures from the above funds also amounted to 170.687 billion yuan. Total revenue in local budgets amounted to 3.177155 trillion yuan, an increase of 518.677 billion yuan or 19.5% more than the figure for 2005, representing 107.3% of the budgeted figure. This included 1.828085 trillion yuan collected at the local level, an increase of 318.009 billion yuan or 21.1% more than the amount for2005, representing 108.2% of the budgeted figure. Expenditures in local budgets totaled 3.100414 trillion yuan, a year-on-year increase of 513.787 billion yuan or 19.9%, and 104.7% of the budgeted figure. Total expenditures included 3.02216 trillion yuan spent at the local level, a year-on-year increase of 506.729 billion yuan or 20.1%, representing 104.8% of the budgeted figure, and 78.254 billion yuan turned over to the central government, 7.058 billion yuan or 9.9% more than the previous year, representing 104.1% of the budgeted figure. Local revenue exceeded expenditures by 76.741 billion yuan and this surplus will be rolled over into the budget for this year. These figures may change slightly when the final accounts are prepared.

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