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Wen: China to press ahead with public finance reform

(Xinhua)
Updated: 2008-03-18 14:05

Chinese Premier Wen Jiabao said Tuesday that he was resolved to press ahead with public finance reform in his five-year tenure so that the people's money could be better spent to serve the people's needs.

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Wen said that the reform "rarely talked about in the past" could help readjust economic structure, optimize economic development pattern, and improve people's livelihood as well as ecology and environment.

Wen made the remarks at a press conference following the conclusion of the first annual full session of the 11th National People's Congress.

After maintaining double-digit growth for five consecutive years, Chinese economy has embarked on a road of rebalancing toward more sustained development. This year, the government has coupled its tight monetary policy with a prudent fiscal policy in the hopes of securing a steady economic growth while avoiding overheating.

Wang Xiaoguang, economist with the National Development and Reform Commission, said that fiscal policies would play a much bigger role than monetary policy in this year's macro-economic control because the main problems facing Chinese economy was structural.

In an exclusive interview with Xinhua, Finance Minister Xie Xuren said that a package of taxes policies would be made to facilitate independent innovation, energy conservation, ecology and environmental protection this year.

Agriculture-related taxation policies would be put into place to strengthen the fundamental role of agriculture in national economy while many sectors such as imports and exports, real estate, finance and resources exploitation could allow taxes much bigger leverage in macro-regulation.

The government would also wield tax tools to stimulate regional economy and encourage the development of social causes such as culture, education, sanitation and sports, Xie said.

The priorities of public finance reform will focus on consumption tax, levies on fuel, energy and resources and the strengthening of local finance, he said.

Describing the public finance reform as one of the three tasks of China's governmental institutional reform in the future, Wen said the government would strive to serve the fundamental interests of the people by doing its work in the open and being transparent.

Wen reiterated that the government and all its institutions belonged to the people.

"Only when the government understands the needs in the community levels can the government make progress. Only when the people know what the government really does can they offer stronger support and more constructive criticism," he said.

"All my colleagues sitting on the podium, including myself, agree that only when you hold people dear in your heart can they support you in your office," Wen said.


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