Nihon Keizai Shimbun：

China's fiscal deficit reached 917.8 billion yuan in the first six months of this year, an increase of 15.1 billion yuan over the same period of last year. What do you think is the main reason for the substantial increase in the base number? And, what do you expect will be the scale of the deficit in the second half of this year? Thank you.

Wang Kebing:

First, the deficit scale was approved by the National People's Congress at the beginning of the year, and the financial department itself has no options in determining it. Moreover, the deficit is calculated according to annual revenues and expenditures. As there is an imbalance between the monthly and quarterly revenues and expenditures, the deficit scale cannot be measured on a monthly or quarterly basis.

Second, even if calculated on an annual basis, the deficit is not simply the result of subtraction between revenues and expenditures, because, in addition to the general public budget revenue collected every year, the annual available revenues also include the central budget stabilization fund transfers according to law, the government-managed fund and the State-owned capital management budget fund allocated according to law, and any surplus fundsnot used up in the previous annual budget and carried forward to the next year.

In terms of spending, apart from general public budget expenditure, we also have expenditure to replenish the central budget stabilization fund. For example, the Budget Law stipulates that a surplus in the general public budget will be totally used to replenish the central budget stabilization fund. Moreover, the expenditure also includes surplus funds carried forward to the next year. Therefore, the fiscal deficit is the overall income from which overall expenditure is deducted.

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