Yicai:

Since the system of direct fiscal fund allocation was established, fiscal funds of the central government have reached local primary-level governments at a faster rate. Could you give us more details on this? What new measures will be rolled out in terms of improving the system? Thank you. 

Liu Kun:

Thank you for your questions. Just now, Mr. Xu talked about the system of direct fiscal fund allocation. I'd like to invite him to answer your questions. 

Xu Hongcai:

Thank you for your questions. Establishing the system of direct fiscal fund allocation is an important decision made by the CPC Central Committee and the State Council, and also a significant innovation in fiscal management. In 2021, the MOF joined relevant departments to regularize the system of direct fiscal fund allocation, and expand its scope. By "regularize" we mean making the direct allocation of budgetary funds to prefecture- and county-level governments during a particular period of 2020 a normal practice, and expanding the system's coverage. Based on the operations last year, the system has given full play to its advantage of directly allocating those funds to primary-level governments, and improved both management efficiency and fund efficiency. Its characteristics are as follows:

First, fast allocation. Fiscal fund allocation took the "direct train" straight to the primary level, directly benefitting businesses and people, and greatly reducing the "travel time." The operation mode of the system of direct fiscal fund allocation last year was different from that of the year before last. When compiling the budget at the beginning of last year, the central government asked provincial-level governments to allocate fiscal funds in 10-30 days, which was longer than the preceding year. Based on feedback from monitoring the direct fiscal fund allocation, most provincial-level governments completed fund allocation in around 10 days, which was really fast, and faster compared with general fund or non-direct transfer payment funds. According to statistics of direct fiscal fund allocation released at the end of last year, the rate of direct fiscal fund allocation was much faster than that of the general public budget, which shows the advantage of being fast.

Second, targeted manner. Annual statistics show 2.8 trillion yuan of direct fiscal funds, of which 2.67 trillion yuan has arrived at fund users. The directly allocated fiscal funds mainly supported local employment, people's well-being, the operation of market entities, wage payments and the normal functioning of primary-level governments. According to incomplete statistics, spending on people's well-being including elderly care services, compulsory education, basic medical services and basic housing services reached almost 2 trillion yuan, fiscal funds directly used for employment exceeded 51 billion yuan, and fiscal funds directly used for relevant enterprises exceeded 600 billion yuan, benefiting more than 1.66 million market entities, which shows that targeted measures based on specific conditions have been effective.

Third, funds directly allocated to primary-level governments and businesses are under strict supervision. We need to give better play to the role of the relevant supervision system and expose these funds to more supervisory bodies to avoid the decline in quality due to high efficiency. The supervision system covers central, provincial, city, and county-level authorities. In terms of the central government, fiscal and auditing bodies and other relevant bodies have all been connected via the internet so that everyone can have access to the flow, allocation, and spending of funds on one internet platform. The supervision efforts in this regard are stricter than that of other kinds of funds. The National Audit Office has carried out follow-up auditing work on implementing major national policies. The results show comparatively fewer violations of regulations concerning these directly-funneled funds. Funds involved in violation of regulations account for a relatively small part, and the use of these funds is more regulated. As the supervision system continues to work, problems will be timely identified and corrected.

This year, we will earnestly review existing experience and practices, further expand the scope of directly-funneled funds and improve the management system. In addition, we will strengthen supervision on these funds and make sure they are used safely and efficiently and based on regulations to give better play to their role and serve for economic and social development.

Thank you.