Finance minister Xie Xuren at a conference in Beijing. (Photo/Xinhua)
China is expected to suffer greater financial strains this year due to the declining growth in its fiscal revenue in 2012, Shanghai's First Financial Daily reports.
The Ministry of Finance's official website issued an article by minister Xie Xuren, in which Xie warned that the country should be well prepared for a financial squeeze and work to cut general spending to reduce administrative costs.
Figures showed that China's cumulative public fiscal revenues reached 11.72 trillion yuan (US$1.88 trillion) in 2012, a growth of 12.8% year-on-year, compared with growth of 24.8% in 2011.
An expert said merely relying on expanding fiscal revenues would not be enough to reduce pressure from high fiscal spending; instead, the government should effectively control spending.
Xie said a significant mismatch of government spending and revenue is expected this year. The growth in fiscal revenue will be lower due to an uncertain international economic situation, a grim domestic economic outlook, declining business profits and a structural tax-reduction policy, in combination with tax reforms.
However, the pressure from increasing spending would be great due to the need to inject more funds into various areas, particularly into the promotion of education, healthcare, social security, agricultural irrigation, economic growth, economic structure adjustments and deepening reforms.
The ministry's figures showed that national fiscal spending reached 12.57 trillion yuan (US$2.02 trillion) in 2012, a growth of 15.1%.
An expert said that the era of high revenue growth of 18%-20% has come to an end. In the future, aiming to maintain a 10% growth rate would be better.
Touching upon the plan of deepening financial reforms this year, Xie said the government would submit the budget for social insurance funds for the first time to improve the management of the budget.
In addition, Xie said, the country should continue to optimize fiscal systems at the provincial levels and lower.