CHINA SAYS 1986 BUDGET DEFICIT 7.08 BILLION YUAN
China posted a budget deficit of 7.08
billion yuan in 1986, the fourth highest since 1949, after a
surplus of 2.82 billion in 1985, Finance Minister Wang Bingqian
told the National People's Congress.
    He put 1986 revenue at 222.03 billion yuan, against a
budgeted 214.17 billion, and up from 185.41 billion in 1985,
and expenditure at 229.11 billion, against a budgeted 214.17
billion and 182.59 billion in 1985.
    Official figures show the record post-1949 budget deficit
was 17 billion yuan in 1979.
    Wang said the 1986 deficit was due to excess capital
construction and administrative expenses and unjustified and
extravagant investments outside the state plan.
    He also blamed the inefficiency of firms whose production
costs and losses rose. He said subsidising state firms' losses
cost 32.25 billion yuan. The 1985 budget did not give a
separate figure for this.
    He said the processing industry developed too fast and some
projects could not start operations because of power shortages,
while too many non-productive facilities were set up.
    Wang said 1986 and 1985 investment in fixed assets rose
15.3 pct and 41.8 pct respectively year on year and consumption
funds rose 12.5 pct and 23.7 pct, outstripping the growth in
national income.
    Wang said revenues were affected by the steep fall in world
oil prices, the decline in the price of primary products, a
drop in income from customs duties and the rising cost of
earning foreign exchange through exports.
    Revenue also fell because the state raised the rate of
depreciation for fixed assets of certain state firms, reduced
their regulatory tax and made other tax cuts for firms.
    Wang said 1986 tax receipts rose to 206.45 billion yuan
from 201.82 billion in 1985, state treasury bond receipts to
6.2 billion from 6.04 billion and receipts from foreign loans
rose to 7.87 billion from 2.5 billion.
    He said 1986 budgetary spending on capital construction
rose to 65.57 billion yuan from 56.97 billion in 1985, on
technical renovation and new products to 12.62 billion from
10.05 billion, aid to rural production and other farm expenses
to 12.03 billion from 10.16 billion, culture, science,
education and public health to 38 billion from 31.72 billion
and defence to 20.13 billion from 19.15 billion.
     Wang said expenditure for repaying principal and interest
on foreign loans in 1986 was 3.4 billion yuan, up from 3.26
billion in 1985.
 REUTER
