County govts to receive more financial support

The central government pledged on Wednesday to provide more financial support to county governments, in a bid to reach sound operations at the grassroots level.

Xie Xuren, minister of finance, announced the plan to offer more financial support to counties in a report to the National People’s Congress Standing Committee, the top legislature.

This is the first time that the country’s top legislature has moved to hear a report on the fiscal capabilities of county governments.

It is also the second time in a row that the lawmaker’s bimonthly session has addressed the finances of county governments.

In June, legislators suggested distributing more tax revenues to local governments to meet increasing city construction and public welfare costs, a move that would reduce their heavy reliance on land sales for revenue.

That suggestion was made in response to the top auditor’s report that said the fiscal capabilities of local governments are facing difficulties and that their fiscal management is “substandard”.

At Wednesday’s session, Xie said the central government will allocate more subsidies to local governments according to their work division and work load. He also suggested increasing general transfer payments to promote fiscal capabilities in underdeveloped areas to improve public service.

The central government said it will offer 107.5 billion yuan ($16.9 billion) in subsidies for county governments in 2012, 30 billion more than last year and almost double the figure in 2010.