What is the fiscal situation like in these hard-hit provinces in China? How will they handle the extra fiscal burden this year? Thank you.
Thank you for your question. Since the outbreak of COVID-19, finance departments have been fully implementing the instructions of the CPC Central Committee and the State Council, and working to ensure adequacy of funding for epidemic prevention and control. We are sparing no effort to ensure people can get medical treatment without worrying about money, also that budget problems across China will not stand in the way of saving lives and containing the spread of the virus. As of Feb. 23, a total 99.5 billion yuan have been issued by finance departments of all levels to achieve the aforesaid goals, 25.52 billion yuan of which has come from the central government. Meanwhile, a series of policies have been introduced. This include further ensuring the supply of key materials, improving incentives for medical staff, issuing preferential tax policies to encourage more donations from society, as well as setting up a "green channel" for government procurement, just to name a few.
We have noticed that after the epidemic outbreak, the balance in government revenue and expenditures, especially those in the hard-hit provinces, have been somewhat affected. With this in mind, finance departments of all levels should make a big push to cut the general expenditure, sparing no effort to raise more funds and optimizing the structure of expenditures. The government revenue and expenditures of all categories should be coordinated with the premise that the funding for epidemic prevention and control is ensured, so as to achieve sound fiscal operations.
The central government has increased transfer payments to local governments, especially general transfer payments. In order to alleviate the pressure on local fiscal expenditures, we arranged, in accordance with the fact the increase in general transfer payments is significantly higher than the increase in central-level expenditures, to alleviate pressure at the local level. It has also speeded up fund disbursement. For example, in order to support local governments to ensure they do a good job in epidemic prevention and control, as well as in ensuring wages, transportation and people's livelihood at the grassroots level, the central government recently allocated 70 billion yuan of balanced transfer payment and 40.6 billion yuan of awards and subsidies under the county-level basic financial support mechanism. The third step is to strengthen treasury dispatch management. We have been paying close attention to the situation related to local treasury funds, the balance of financial revenue and expenditure of Hubei province and other provinces affected by the epidemic, and strengthened capital allocation to ensure that funds for epidemic prevention and control and funds regard to the "Three Guarantees" are allocated in full and on time.
The epidemic has a certain impact on both financial and economic sectors, but overall, the economic fundamentals have not changed. Economic development is the source of financial revenue. We believe that, with the improvement of the epidemic situation and the gradual recovery of production, and with the strong support of economic development, we can achieve the stable fiscal operations across the country. Thank you.