CNBC:

My question is about the increase of 1.5 trillion yuan in transfer payments from the central to local governments proposed in the government work report of this year. Will this number increase further? How much will it be? Thank you.

Xu Hongcai:

Thank you. I will answer your question concerned by local governments.

According to the central budget approved by the National People's Congress, transfer payments from the central to local governments will reach about 9.8 trillion yuan in 2022, an increase of nearly 1.5 trillion yuan or 18 percent over the previous year. Among them, regular transfer payments reach 9 trillion yuan, with a rise of 8.4 percent, a relatively high rate in recent years. We divide it into general transfer payments and special transfer payments. The former will reach 8.2 trillion yuan, up 8.7%, and the latter will reach 0.8 trillion yuan, up 4.7%. The increase in general transfer payments is higher, indicating that more transfer payments can be pooled and used by local governments compared with the special transfer payments.

Besides regular transfer payments, the rest of 800 billion yuan will be allocated to support local governments in implementing tax rebates policy, other tax and fee cuts, and increasing spending on key areas related to people's well-being.

In addition to the above-mentioned transfer payments, we have also allocated 400 billion yuan of government-managed funds to be carried over next year to clear the tax refunds borne by the central government and increase the amount of transfer payments to local governments accordingly. At present, most of the transfer payment funds have been distributed to local governments in accordance with the law, of which 4 trillion yuan has been included in the normalized direct mechanism management. This is the case with budgetary arrangements. The refund process is relatively fast, so it is estimated that some liquidation funds originally planned to be carried over next year will be distributed to local governments in advance, thus meeting the needs of fund allocation at the local level.

Next, based on implementing the existing policies, we will fully carry out the decisions and plans of the CPC Central Committee, promptly design and use new incremental policies, enhance well-timed regulation, properly adopt target-oriented policies in advance and leave enough space, so as to make solid progress. We will work hard to achieve the goals of economic and social development throughout the year and keep the economy running within an appropriate range.