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Xi Yanchun:

Thank Mr. Liu Wei for his introduction. Now, the floor is open to questions.

Phoenix TV: 

We have noticed that the recent National Conference on Financial Work demanded local government debts be strictly controlled. A lifelong accountability system and a system to retrospectively hold officials accountable for their erroneous acts were to be implemented. At a meeting of the Political Bureau of the CPC Central Committee, a warning was issued about local government debts and improvements were sought in a mechanism for local governments to secure financing so as to contain hidden debt-related risks of local governments. From this point of view, what is your opinion, and how will you implement the central government's requirements?

Liu Wei:

The question you have raised is one that all sectors of society have been paying close attention to. At the meeting of the National Conference on Financial Work, President Xi Jinping laid down new and higher requirements. The CPC Central Committee and the State Council have placed emphasis on preventing and reducing risks of local government debts. In recent years, the Ministry of Finance has strengthened top-level planning, promoted institutional set-up and formed a "closed cycle" system for local government debt management and supervision. Let me introduce the work in detail. 

 First, setting ceilings on local government debts. It is known that ceilings on local government debts should be examined and approved by the National People's Congress. And the ceilings on government debts are determined through certain procedure for each province, and it is not allowed to break through.

Second, bringing local government debt under budgetary management. It means that new debts must be included in budget and under the examination and supervision of the National People's Congress. Local governments cannot freely increase their debts at will.

Third, issuing new local government bonds. Local governments can issue bonds within the statutory limit in a legal and regulated way. The amount of bonds to be issued by local governments should be decided in accordance with their ability of debt repayment and their needs of financing.

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