Bloomberg:

In the materials we received, it was mentioned that the current debt level is not high. Previously, a number of officials from the People's Bank of China talked about the fact that there's still space to raise the deficit rate, but people from the private sector thought the current fiscal deficit rate may reach 10 percent, when adding direct expenditure to it, and that the whole debt level will probably reach 280 percent. If such a level can be regarded as “not high”, then what level should be the warning level?

Wang Kebing:

I don't know where your statistics of the 10 percent deficit rate comes from, because fiscal deficit is not simply decided by the fiscal department itself. I just said, in the last year, the national fiscal deficit rate is 2.4 percent, and this year, it has been raised to 3 percent. Since the fiscal revenue will be handed over to the national treasury, every expense shall be executed according to the budget approved by the National People's Congress, and will be made public information. So, the deficit plan has also been approved by the National People's Congress. So, I don't know where the 10 percent deficit rate came from, we can have more communication later.

China News Service:

I would like to ask two questions. First, how should we define the overall debt rate? How do you do the math? Also, last week at another press conference here, an expert from the Chinese Academy of Social Sciences said that in establishing a specific and only department to deal with debt issues, the government departments have reached a consensus. So, I would like to ask if there's any specific arrangement? Is there a timetable? Thank you!

Ruan Jianhong:

To do the math surrounding the debt rate, in the macroeconomic perspective, we have three institutional sectors involved, including the resident, enterprise, and government sectors. If the three sectors all have balance sheets, we can add the debts up and then divide it by the GDP, so we can get the debt rate of the overall economy. But when we do these calculations, you have to realize some very important problems. One is the debt among these sectors, which are our focus. The internal debt inside a sector should be offset by balance in national economic accounting. For example, the debt among individuals should be excluded from the national debt. It is the same for the enterprise sector; the credit sales during their operation also could not be included in the debt. When we do specific debt scale statistics, we have to stick to two principles. First, the debt inside a sector should have an offset balance or have consolidated financial statements. The second, we must clear up the marginal relationships among sectors, especially how we recognize the possible debt and to which sector a debt belongs. In this aspect, the statistics data also needs support. Only if you effectively take out the internal debt in sectors and get the amount of possible relationships and possible debt among sectors, can we calculate an appropriate debt scale.

Now, many institutions are estimating the debt scale. Some of them directly use statistical indexes to add it up. Actually, in every statistical index, every institutional sector has crossover in this debt tool. We need to figure out how big the crossover is. If you directly use the statistical index to estimate, sometimes you cannot clear up the amount among sectors in the index. The two problems should be resolved when calculating the debt scale.

From the perspective of the international experience, Organization for Economic Cooperation and Development countries have done a number of studies on debt scale regarding the enterprise sector, there is a big difference between consolidated financial statements and non-consolidated financial statements, the difference gap can be as high as 15 - 16 percent. So, when we calculate the debt scale for our country, we very seriously studied the conceptions and ideas that have been publicly expressed by our current institutions. At the same time, we should be very careful and accurately define China's debt scale. This is my answer to the question about definition. Thank you.

Sun Xuegong:

The debt issues cover wide range of aspects; there are enterprise debt, government debt, and resident debt. It is indeed in need of coordination among various departments, including the four departments who sent representatives today for this conference. But of course, it is not limited to the four departments. Actually, there are more than 10 departments that are working on it together. As to what the future mechanism will be like, we will make further studies according to the arrangements of the CPC Central Committee and the State Council.

Xi Yanchun:

Today, officials from several departments came to this press conference to answer your questions; this indicates a showing of overall planning and coordination. In the future, if you have more questions involving more departments, we, the Information Office of the State Council, would love to build a platform to invite more departments to come here to communicate with you. Next question?

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