Government Finances and Budget
China's government debt is less than 25% of gross domestic product (about 22.10% in 2006). (See List of countries by public debt.)
China has a budget deficit of around 1.5% of GDP. China projected a budget deficit of 295 billion yuan in 2006, down 1.7% from 2005. The overall budget deficit in 2004 was approximately US$26 billion, an amount equivalent to about 1.5% of GDP. In 2007, economic planners expect China's already small budget deficit to shrink again. According to economists, this has afforded China to spend more on public services such as education and healthcare.
The government budget for 2004 was US$330.6 billion in revenue and US$356.8 billion in expenditures. 95.5% of revenue was from taxes and tariffs, 54.9% of which was collected by the central government and 45% by local government. The expenditures were for culture, education, science, and health care (18%); capital construction (12%); administration (14%); national defense (7.7%); agriculture, forestry, and water conservancy (5.9%); subsidies to compensate for price increases (2.7%); pensions and social welfare provisions (1.9%); promotion of innovation, science, and technology (4.3%); operating expenses of industry, transport, and commerce (1.2%); geological prospecting (0.4%), and other (31.9%).
Read more about this topic: Chinese Financial System
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