II. Central and Local Draft Budgets for 2016
This year is the first year of the decisive stage in finishing building a moderately prosperous society in all respects and an important year for surmounting difficulties in the push towards structural reform. China's economic fundamentals remain favorable for long-term growth, its economy remains resilient with strong potential and ample room for growth, the foundation and conditions for supporting sustained growth remain intact, and the momentum for economic structural adjustment has not slackened. Yet at the same time, China must simultaneously deal with the slowdown in economic growth, make difficult structural adjustments, and absorb the effects of previous economic stimulus policies. Structural issues are pulling down total factor productivity growth, and the economy still faces considerable downward pressure.
On the fiscal front, China receives most of its tax revenue from taxes related to goods and services, so as economic growth slows down and the PPI continues to fall, fiscal revenue growth is slowing at a rate greater than that of GDP growth. Additionally, the greater reductions in taxes and fees aimed at maintaining steady economic growth and pushing forward structural reform, and the substantial loss in revenue from across-the-board implementation of the reform to replace business tax with VAT in particular, are further pulling down growth in fiscal revenue. On the other hand, government expenditures are rather inflexible and will be driven up by the efforts to transform the growth model, strengthen points of weakness, and guard against risks. On the whole, the fiscal situation in 2016 will present a more challenging environment in which to achieve a balance of payments.
In light of the fiscal and economic landscape, in preparing the budgets for 2016 and carrying out public finance work, we need to thoroughly put into practice the guiding principles from the 18th National Congress of the CPC, the third, fourth, and fifth plenary sessions of its 18th Central Committee, the Central Economic Work Conference, and General Secretary Xi Jinping's major policy addresses. Acting in accordance with the decisions and plans of the CPC Central Committee and the State Council, the overall plan for promoting all-round economic, political, cultural, social, and ecological progress, as well as the Four-Pronged Comprehensive Strategy,*(1) we must firmly establish and put into practice the philosophy of innovative, coordinated, green, open, and shared development, adapt to the new normal in economic development, adhere to the policy of reform and opening up as well as the general principle of making progress while keeping performance stable, and follow the general guidelines that macro policies should be stable, industrial policies targeted, micro policies flexible, reform policies practical, and that social policies should ensure basic living needs. We will continue to implement proactive fiscal policy and increase its intensity. We will accelerate reform of the fiscal and tax systems, promote supply-side structural reform while moderately expanding aggregate demand, support efforts to cut overcapacity and excess inventory, deleverage, reduce costs, and strengthen points of weakness, and facilitate adjustments to the industrial structure and the emergence of new drivers of growth. We need to continue to manage public finances on the basis of law and fulfill all of the requirements of the Budget Law. We need to increase overall coordination in the use of government funds, put both idle and additional funds to work, and optimize the structure of budgetary expenditures to improve the performance of fiscal spending. We need to tighten our belts, practice thrift, and prioritize expenditures towards ensuring the basic living standards of the people while strictly controlling general expenditures and reducing other expenditures. We need to strengthen government debt management, effectively guard against fiscal risks, and work hard to ensure a good beginning for economic and social development in the 13th Five-Year Plan period.
(1)* The Four-Pronged Comprehensive Strategy is to make comprehensive moves to finish building a moderately prosperous society, deepen reform, advance the law-based governance of China, and strengthen Party self-conduct.
1. Fiscal policy for 2016
We will continue to implement proactive fiscal policy in 2016 and increase its intensity. This will be mainly reflected in the following four areas.
First, we will further reduce taxes and fees.
We will implement the trials for replacing business tax with VAT in all sectors, extending it to the construction, real estate, financial, and consumer service industries, and allowing businesses to deduct the VAT on their new real estate purchases or on their payments for real estate rentals. We will step up efforts to clear up and reform administrative charges and government-managed funds by expanding the scope of exemptions for 18 types of administrative charges from only small and micro businesses to all enterprises and individuals, reducing required payments into new vegetable land development funds and forestry maintenance funds to zero, suspending the collection of payments into price adjustment funds, and increasing the body of tax payers eligible for exemption from educational surcharges, local educational surcharges, and water conservancy development fund payments by raising the cutoff for eligibility from a monthly sales or turnover figure of 30,000 yuan to 100,000 yuan. It is projected that the above tax and fee reduction policies will save businesses and individuals more than 500 billion yuan over the course of 2016.
Second, we will allow the deficit to increase.
Government deficit for 2016 is projected to be 2.18 trillion yuan nationwide, an increase of 560 billion yuan over 2015, and the deficit to GDP ratio is projected to be 3%, 0.6 percentage points higher than 2015. While appropriately increasing mandatory government expenditures, we will ensure the expanded deficit goes mainly towards filling the gap in government revenue left by tax and fee reductions, enabling the government to meet its expenditure responsibilities.
In addition, we will also allow a considerable rise in the special debt of local governments that is included in the budgets of government-managed funds, and we will put into use more carryover and surplus funds so as to ensure sufficient levels of both total spending and key area spending.
Third, we will adjust and optimize the structure of expenditures.
We will make the proper arrangements for expenditures aimed at promoting the wellbeing of the people in line with the principles of sustainability and ensuring basic needs. We will strictly control budgets for spending on official overseas visits, official vehicles, and official hospitality, while also reducing general expenditures such as those related to meetings. We will carry out rational assessments of policy-linked expenditures and unsustainable expenses, such as those made on overly ambitious commitments or on overly high expenditure standards during times of high revenue growth, and make prompt reductions on the basis of these assessments. We will improve the structure of transfer payments, focusing on cutting the number of special transfer payment items while making corresponding increases to general transfer payments aimed at creating more equitable access to basic public services as well as to transfer payments for old revolutionary base areas, areas with concentrations of ethnic minorities, border areas, and poor areas. Infrastructure investment by the central government will be more focused on basic public welfare projects within its purview, and less on small or miscellaneous projects. This investment is projected to be 500 billion yuan in 2016, which is an increase of 22.4 billion yuan over 2015.
Fourth, we will increase overall coordination in the use of fiscal funds.
We will appropriately trim the 2016 budgets for regions and departments that had a significant amount of government funds left over at the end of 2015. We will promptly reallocate funds that are no longer being used into key spending areas and reduce carryover expenditures produced by accrual accounting. We will move the carryover and surplus funds of government-managed fund budgets that exceed stipulated ratios into general public budgets so that they can be utilized in a coordinated way. We will also raise the proportion of funds transferred from the budgets for state capital operations into general public budgets. At the same time, we will make innovations in the way the government carries out its expenditures with a view towards increasing efficiency.
The primary policies regarding government expenditures are as follows:
Education
We will further improve the mechanisms for ensuring funding for urban and rural compulsory education and set a unified benchmark for public funding per student in compulsory education schools. We will continue to carry out major projects such as the initiative for improving conditions in badly built or poorly operated rural schools providing compulsory education, and eligible students from families with financial difficulties will be the first to be exempted from tuition and miscellaneous fees at regular senior high schools. We will continue to implement the quality improvement plan to develop modern vocational education, encouraging local governments to establish sound systems for allocating funds to vocational colleges based on student enrollment, improving conditions in secondary vocational schools, training a contingent of teachers strong in both theory and practice, and promoting the integration of vocational education with industry work as well as cooperation between colleges and businesses. We will support the development of kindergartens open to all children. We will improve the budgetary appropriation system for institutions of higher learning and guide these institutions in improving their quality, optimizing their structure, and developing their own unique characteristics. We will improve the system of policies for providing financial aid to students from poor families and make such aid more targeted.
Science and technology
We will complete the optimization and integration of science and technology programs financed by the central government, finish building an open and unified national science and technology management platform, and establish a mechanism for entrusting the management of research programs to specialized agencies. We will give a high level of support to the National Natural Science Foundation of China, major science and technology projects, and key research and development programs. We will accelerate the implementation of the national seed fund for encouraging the application of scientific and technological advances and put in place loan default compensation mechanisms for banks in order to encourage them to provide loans to medium, small, and micro businesses. We will promote the establishment of a number of national laboratories in important innovation fields. We will facilitate the reform and development of research institutions by improving the mechanisms for providing them with consistent support. We will put in place management mechanisms for post-research program subsidies.
Social security and employment
In 2016, the central government will subsidize local governments in raising the level of subsistence allowances by 5% in urban areas and 8% in rural areas. We will conduct research on the establishment of a sound system for providing basic necessities to extreme poverty groups as well as mechanisms for guaranteeing funding for these efforts. We will support localities in comprehensively establishing systems for providing living allowances to needy persons with disabilities and for providing care service subsidies to people with serious disabilities. We will ensure the implementation of benefits for entitled groups and support the proper settlement of demobilized military personnel.
In consideration of factors such as the rates of increases in average wages and price levels, as of January 1, 2016, pension benefits for retirees of enterprises, Party and government offices, and public institutions will be increased by around 6.5%, with appropriate preference given to those who have retired some time ago and are on relatively low pension benefits as well as those who have retired from enterprises in hardship and remote areas. We will put in place a mechanism for making regular adjustments to basic salaries and promote coordination between the benefit increases for those employed and retired. We will improve the personal account side of the old-age insurance scheme for workers, ensure that it remains in actuarial balance, establish more transparent and easily understood collection and payment systems, and further improve incentives for encouraging people to contribute more. We will also improve the reform plan for the old-age insurance systems and conduct research on putting the social pension of workers under national unified management.
We will improve policies that encourage college graduates to seek employment in small and medium-sized high-tech, high-innovation enterprises, start their own businesses, or find employment at the community level in urban and rural areas, and we will expand the channels through which college graduates can look for jobs. We will conduct research on policies for regulating public-service job positions, set up long-term mechanisms to support the employment of groups having difficulties in finding jobs, and help migrant workers obtain equal access to public employment services.
Health care
We will set up sound, sustainable mechanisms for various parties to reasonably share the costs of health insurance. We will raise the annual government subsidies for basic health insurance for rural and non-working urban residents from 380 yuan to 420 yuan per person, and increase annual personal contributions from 120 yuan to 150 yuan per person, with the increases to be mainly used to provide better basic medical insurance and boost support for the major disease insurance scheme for rural and urban non-working residents. We will increase government subsidies for basic public health services from 40 yuan to 45 yuan per person per year. We will integrate the basic health insurance systems and their management systems for rural and non-working urban residents. We will comprehensively advance the reform of health insurance payouts to help control medical expenses and regulate medical treatment practices. We will press ahead with the reform of public hospitals and community-level health care institutions, adjust and optimize the distribution of medical resources in conjunction with the new type of urbanization, and put in place a tiered diagnosis and treatment system. We will work to reduce the burden of medical expenses on low-income patients suffering from major or critical diseases by providing them with assistance and ensuring such assistance is better linked with other health insurance programs.
Fighting poverty
In 2016, the central government will increase all expenditures relating to poverty alleviation efforts; this includes the appropriation of an additional 20.1 billion yuan of funds earmarked specifically for poverty reduction, which is an increase of 43.4% over last year. We will further expand the pilot scheme for helping those living in poverty realize returns on their asset investments, work hard to relocate those living in inhospitable areas, support poor counties in integrating the use of government funds for rural development, and concentrate our efforts on tackling severe poverty. We will continue to provide assistance to ethnic minorities living in poverty and to poor state-owned agricultural farms and forestry farms, and we will also provide poverty-relief employment programs. We will put into effect programs to use public welfare funds financed by lottery proceeds in support of old revolutionary base areas facing poverty. While delegating powers for the review and approval of programs supported by poverty-relief funds, we will strengthen supervision over such funds to ensure their secure and effective use. With targeted measures for reducing poverty, we will work to help poor areas tap into their potential for development and make their development sustainable so that both poor areas and poverty groups can lift themselves out of poverty at an even faster pace.
Agriculture
We will make adjustments to the structure of agricultural expenditures, increasing support to efforts to promote sustainable agricultural development. We will work to discourage the excessive use of insecticides and fertilizers and explore conducting trials on the implementation of systems of crop rotation and fallow land. We will introduce policies to promote adjustments to the agricultural production mix and support comprehensive price reform of water used for agricultural purposes. We will continue to move ahead with trials for restoring and improving cultivated land contaminated by heavy metals as well as trials for comprehensively dealing with the over-abstraction of groundwater.
We will support the implementation of a food crop production strategy based on farmland management and the application of technology in order to ensure the effective supply of agricultural products as well as grain security. We will make a large-scale push to develop farmland irrigation systems and high-quality farmland in order to help increase overall grain production capacity. We will carry out nationwide reform of direct subsidies to grain growers, subsidies for purchasing superior crop varieties, and general subsidies for the purchase of agricultural supplies. We will support the development of diverse forms of appropriately scaled-up agricultural operations and work to promote integrated development of the primary, secondary, and tertiary industries in rural areas. We will improve mechanisms for subsidizing major grain growing areas and increase rewards given to major grain-producing and edible oil-producing counties. We will support the reform and development of state forestry farms, state forestry areas, rural supply and marketing cooperatives, and state farms built on reclaimed land. We will promote the orderly and effective operation of the China Overseas Agricultural Investment and Development Fund and work to see China's agriculture go global.
We will provide support for the reform of logistics systems for grain and other agricultural products. We will deepen the pilot reform for ensuring guaranteed base prices for cotton and soybeans. We will promote reform of the system for purchasing and stockpiling corn. We will also improve mechanisms for stockpiling and regulating the supply of major agricultural products. Although the above reform measures will increase government expenditures for a time, this is a necessary cost of reform. Following the establishment of a market-based price formation mechanism for grain, cotton, and edible oils, we will work towards gradually reducing stockpiles of these products to appropriate levels so that the fiscal burden from stockpiling expenses can see a corresponding return to normal levels.
Ecological conservation and environmental protection
We will go further in supporting efforts to control air pollution. We will promote the implementation of the action plan for water pollution prevention and control. We will carry out trials for the restoration and improvement of mountain, water, forest, and farmland ecosystems. We will implement a new round of policies for providing subsidies and awards to efforts to return marginal farmland back into forest or grassland and to preserve the ecology of grasslands. We will put in place nationwide coverage of protective policies for all natural forests, and appropriately increase subsidies for natural forest protection projects as well as the levels of compensation for forest management and conservation efforts that produce a positive ecological impact. We will strengthen wetlands protection efforts and expand the scope of work to return cultivated land back into wetlands. We will increase efforts to promote the use of new-energy vehicles and accelerate the construction of battery-charging facilities. We will work to ensure the cleaner use of resources by promoting more efficient, centralized coal operations and utilizing pollutant-capturing equipment while restricting less efficient, dispersed coal operations. We will improve the mechanism for subsidizing the use of renewable energy for electricity generation and work to see that electricity generated from renewable energy can come on the grid at a price comparable to that of conventional electricity generation methods as soon as possible. We will expand the comprehensive demonstrations of achieving energy conservation and emissions reductions through fiscal policy as well as the scope of trials for having provinces situated on the upper and lower reaches of river basins compensate each other for their impact on water quality. We will promote reform of environmental monitoring systems so as to step up the pace of establishing a monitoring system in which the central and local governments assume separate responsibilities.
Government-subsidized housing projects
We will continue to carry out the trials of developing and operating public rental housing through PPP models. We will put in place preferential tax and fee policies and loan interest subsidy policies for projects to renovate run-down urban areas, promote efforts to grant direct monetary housing subsidies to people displaced by the redevelopment of such areas, and actively encourage government procurement of renovation services. This year we plan to start renovating 6 million housing units in run-down urban areas and 3.14 million dilapidated houses in rural areas.
Culture and sports
We will work hard to ensure that access to basic public cultural services becomes increasingly standardized and equitable, and that both quality and efficiency are increased in the provision of public cultural services. We will support efforts to help socialist art and literature thrive while promoting cultural exchanges and communication. We will improve the systems for providing policy support to cultural industries. We will continue to promote public fitness programs and support the reform and development of soccer in China. We will work to ensure adequate funding for China's preparation for and participation in the 2016 Olympic Games in Rio de Janeiro.
National defense and armed forces development
We will support efforts to deepen the reform of national defense and the armed forces and strengthen the military in all respects so that it is more revolutionary, modern, and standardized. We will promote integrated development of the economy and national defense. We will work hard to ensure that the capabilities of the armed forces are constantly improving, and that they are able to safeguard the sovereignty, security, and development interests of China.
Overcapacity reductions and the resettlement of workers
We will urge local governments and enterprises directly under the central government to accelerate their efforts to cut overcapacity in the steel and coal industries through the use of a combination of methods such as mergers, reorganizations, debt restructurings, and bankruptcy liquidations. In this process, the market should serve as a check, enterprises should be the major actors, local governments should play a coordinating role, and the central government should provide due support, while the responsibility for making sure that overcapacity reductions happen in a locality will be on the relevant provincial-level government. We will allocate a total of 100 billion yuan from the central government budget, including 50 billion yuan to be used in 2016, for setting up tiered awards and subsidies for eligible worker resettlement projects by local governments and central government enterprises. These awards and subsidies will be provided on the basis of levels of performance (linked mainly to overcapacity reductions), the number of workers that require resettlement, the level of hardships faced by the local government, and other factors. At the same time, local governments should also allocate funds on the basis of their task requirements to ensure that adequate financing is available during overcapacity reductions and work together with the central government to carry out this work successfully.
2. Revenue projections and expenditure appropriations for 2016
(1) General public budgets
Revenue in the central government's general public budget is expected to reach 7.057 trillion yuan, an increase of 2.2% over the actual figure for 2015. Adding in the 100 billion yuan from the Central Budget Stabilization Fund and the 31.5 billion yuan from the budgets of central government-managed funds and central government state capital operations, total revenue in 2016 should amount to 7.1885 trillion yuan. Expenditures from the central government's general public budget are projected to reach 8.5885 trillion yuan, an increase of 6.3% (or an increase of 6.7%, if the use of the 172.5 billion yuan carried over from previous years is included). Total expenditures are projected to exceed total revenue leaving a deficit of 1.4 trillion yuan, an increase of 280 billion yuan over last year. The ceiling for the outstanding balance of central government bonds will be 12.590835 trillion yuan. The Central Budget Stabilization Fund will carry a balance of 15.637 billion yuan.
Expenditures in the central government's general public budget are divided into central government expenditures, tax rebates for local governments, general transfer payments to local governments, special transfer payments to local governments, and payments to central government reserve funds.
Central government expenditures are projected to total 2.7355 trillion yuan, up 7% over last year. This consists of 270.643 billion yuan for science and technology expenditures, up 9.1%; 51.971 billion yuan for foreign affairs-related expenditures, up 8.6%; 954.354 billion yuan for national defense spending, up 7.6%; 166.815 billion yuan for public security expenses, up 5.3%; 120.138 billion yuan for expenditures on general public services, up 13.7%; and 329.929 billion yuan for interest payments on debt, up 15.1%. Central government spending on official overseas visits, official vehicles, and official hospitality will adhere to the policy of zero-growth.
Central government tax rebates to local governments are projected to be 508.857 billion yuan, which is basically consistent with the actual figure for 2015.
General transfer payments to local governments will amount to 3.201782 trillion yuan, up 12.2% over last year. Of this amount, transfer payments for equalizing access to basic public services will account for 2.039225 trillion yuan, up 10.2%, which will be mainly used to help alleviate the burden on local governments due to falling revenue growth and increased expenditures; transfer payments to old revolutionary base areas, areas with concentrations of ethnic minorities, border areas, and poor areas will reach 153.791 billion yuan, up 22.4%; transfer payments for basic pension schemes will total 504.276 billion yuan, up 14.5%; and transfer payments for the rural and non-working urban resident health insurance systems will come to 242.627 billion yuan, up 14.3%.
Special transfer payments to local governments will come to 2.092361 trillion yuan, a reduction of 3.2% from last year. The number of items eligible for special transfer payments will be strictly limited and the payment amounts for each item will be effectively reduced, particularly with regard to projects that involve competitive areas or subsidies for enterprise operations. Expenditures that are not in line with policy intentions or are no longer highly beneficial, such as price subsidies for refined oil products, will be reduced by a large margin. Expenditures that have been made unnecessary due to changes of circumstances, such as interest subsidies on loans used to finance public infrastructure construction in development zones, will be canceled. Additionally, special transfer payments for miscellaneous or redundant local projects will be further reduced or canceled. At the same time, special transfer payments to be used for ensuring basic living standards will be increased overall, with increases in the following areas: 17.663 billion yuan for the quality improvement plan for modern vocational education, up 19.4%; 137.013 billion yuan in basic living allowances and subsidies for people facing financial difficulties, up 5.7%; 40.933 billion yuan in subsidies for entitled groups, up 19.8%; 54.121 billion yuan for public health services, up 8.8%; 14.113 billion yuan in subsidies for medical assistance, up 9.2%; 23.286 billion yuan in subsidies for agricultural resource and ecological conservation efforts, up 16.5%; 121.8 billion yuan in funds earmarked for central government subsidies for urban housing projects, up 0.8%; 26.335 billion yuan for renovating dilapidated rural houses, up 1.4%; and 39.771 billion yuan in allowances for the settlement of decommissioned military personnel, up 12.7%.
A total of 50 billion yuan will be appropriated for central government reserve funds.
Figure 2
Projected Revenue and Expenditures in the General Public Budget of the Central Government for 2016
Revenue in local governments' general public budgets is projected to total 8.663 trillion yuan, up 3.6% from last year. Adding in the 5.803 trillion yuan in tax rebates and transfer payments from the central government and the 40 billion yuan transferred from other local sources, total local government revenue is expected to reach 14.506 trillion yuan. Expenditures from local governments' general public budgets are projected to total 15.286 trillion yuan, which after deducting utilized carryover and surplus funds from last year and funds transferred from other sources is an increase of 6.3%. The projected local government deficit therefore stands at 780 billion yuan, an increase of 280 billion yuan over last year. This deficit will be made up for through the issuance of local government general bonds. The ceiling for the outstanding balance of local government general bonds will be 10.70724 trillion yuan.
Combining the general public budgets of the central and local governments, it is projected that nationwide revenue will amount to 15.72 trillion yuan, up 3% from last year. Adding in the 171.5 billion yuan transferred from other sources, total revenue available is expected to reach 15.8915 trillion yuan. Nationwide expenditures are budgeted at 18.0715 trillion yuan, which after deducting local governments' utilized carryover and surplus funds from last year and funds transferred from other sources is an increase of 6.7%. This will produce a national deficit of 2.18 trillion yuan, an increase of 560 billion yuan over 2015.
The above figures of budgeted revenue and expenditures for 2016 also take into account figures from government-managed fund budgets that were transferred into general public budgets: from January 1, 2016, the revenue and expenditures of five government-managed funds, such as water and soil conservation subsidies, were transferred into general public budgets. While budgetary revenue and expenditures for government-managed funds have been reduced, we have made corresponding increases in the estimated revenue and expenditure figures for the 2016 general public budgets as well as in the revenue and expenditure baseline figures for 2015.
2. Budgets for government-managed funds
Revenue into central government-managed funds is projected to reach 427.165 billion yuan, up 5% from last year. Adding in the 24.817 billion yuan carried forward from last year, revenue into central government-managed funds will total 451.982 billion yuan. Expenditures from central government-managed funds will be 451.982 billion yuan, up 5.5%. This figure consists of 340.523 billion yuan of central government expenditures, up 12.8%, and 111.459 billion yuan of transfer payments to local governments, down 11.9%.
Revenue into local government-managed funds is projected to be 3.290209 trillion yuan, down 12.4%. This figure includes 2.82486 trillion yuan from the sale of state-owned land use rights, down 13.2%. Adding in the 111.459 billion yuan in transfer payments from central government-managed funds and the 400 billion yuan of revenue generated from local government special debt (an increase of 300 billion yuan over last year), total revenue related to local government-managed funds is projected to be 3.801668 trillion yuan. Total expenditures related to local government-managed funds will be 3.801668 trillion yuan. This includes 3.202408 trillion yuan of expenditures related to the proceeds of selling state-owned land use rights, down 2.6%. The balance of outstanding special debt of local governments will be no more than 6.48019 trillion yuan.
Combining the budgets for the central and local government-managed funds, revenue into these funds is projected to be 3.717374 trillion yuan, a decrease of 10.7% from last year. Adding in the 24.817 billion yuan carried forward from last year and the 400 billion yuan of revenue generated from local government special debt, revenue into government-managed funds nationwide will be 4.142191 trillion yuan. Total expenditures related to these funds will reach 4.142191 trillion yuan, down 1.2%.
It should be noted that, following the inclusion of the revenue and expenditures of five government-managed funds, such as water and soil conservation subsidies, into general public budgets, total budgetary revenue and expenditures of central and local government-managed funds will decrease in 2016. Because of this, we have correspondingly lowered the baseline figures for 2015 so that the level of growth can be calculated on a comparable basis.
3. Budgets for state capital operations
In 2016, we will strive to further refine the budgeting system for state capital operations. First, the proportion of funds allocated from the state capital operations budget of the central government to its general public budget will be raised from 16% in 2015 to 19% this year. Second, a total of 68 enterprises, including China Railway Corporation, will be incorporated into the central government's state capital operations budget. Third, the utilization of funds will be prioritized towards addressing longstanding problems of SOEs, reducing overcapacity, and making proper arrangements for laid-off employees.
Budgetary revenue from the state capital operations of the central government is projected to be 140 billion yuan, down 13.2% from last year. This decrease comes primarily from lower than expected enterprise profits in the petroleum, petrochemical, steel, and coal industries. Adding in the 39.723 billion yuan carried forward from last year, total budgetary revenue from central government state capital operations is projected to be 179.723 billion yuan. Budgetary expenditures on these operations are expected to be 155.123 billion yuan, up 37.3%. Of this, 119.123 billion yuan is to be spent at the central level, an increase of 18.5%, and 36 billion yuan is to be transferred to local governments, an increase of 189.6%. A projected 24.6 billion yuan will be transferred into the general public budget.
Budgetary revenue from the state capital operations of local governments is projected to be 89.47 billion yuan, down 5.5% from last year. Adding in the 36 billion yuan of transfer payments from the central government's state capital operations budget, total budgetary revenue from local government state capital operations will be 125.47 billion yuan. Budgetary expenditures on local government state capital operations are estimated to be 106.782 billion yuan, up 29.2%. This increase is primarily due to a rise in transfer payments allocated from the budgets of the central government's state capital operations for the purpose of helping relieve SOEs of their obligation to provide water, electricity, heating, gas, and property management services to their employees' homes as well as advancing the reform of collectively owned businesses operated by SOEs. A projected 18.688 billion yuan is to be allocated to local government general public budgets.
Combining the state capital operation budgets of the central and local governments, budgetary revenue nationwide is projected to be 229.47 billion yuan, down 10.4% from last year. Adding in the 39.723 billion yuan carried over from last year, total budgetary revenue from state capital operations nationwide will be 269.193 billion yuan. Budgetary expenditures on state capital operations nationwide are expected to be 225.905 billion yuan, up 23.3%. A projected 43.288 billion yuan will be transferred into general public budgets.
4. Budgets for social security funds
Revenue into social security funds nationwide is projected to be 4.714419 trillion yuan, up 5.6% from last year, which includes 3.437659 trillion yuan from insurance premiums and 1.084804 trillion yuan from government subsidies. Expenditures from social security funds nationwide will total 4.354653 trillion yuan, up 10.6%. With a projected surplus of 359.766 billion yuan this year, the year-end balance will be 6.06 trillion yuan after the balance from 2015 has been rolled over.
It should be noted that as local budgets are formulated by local people's governments and submitted for approval to the people's congresses at their respective levels, the relevant data is still in the process of being compiled. As such, the above-mentioned figures for local revenue and expenditures have been compiled by the central finance authorities.
For a detailed account of the budget arrangements related to the above items, please refer to the 2015 Nationwide Budget Execution Report and draft 2016 Nationwide Budget of the People's Republic of China.
In accordance with the Budget Law, after the beginning of a new financial year and prior to the approval of the drafts of the central and local government budgets by the National People's Congress, arrangements may be made for the following expenditures:
-- carryover expenditures from the previous financial year
-- basic expenditures and program expenditures of government departments and transfer payments to lower-level governments that must be made in the current year, after referring to the amount of budgetary expenditures for the corresponding period of the previous year
-- expenditures mandated by law
-- expenditures for dealing with natural disasters and other emergencies
In accordance with the above stipulations, in January 2016, expenditures in the central government's general public budget totaled 838.7 billion yuan, which includes 153.7 billion yuan spent at the central level and 685 billion yuan in tax rebates and transfer payments made to local governments.