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Scrutiny debate draws near

Updated: 2014-08-26 06:57
By ZHAO YINAN (China Daily)

Vote looms on plan for supervision, transparency of government budgets

A seesaw battle on whether government spending should face tougher supervision and how such scrutiny would be conducted is coming to an end after a decade-long stalemate.

The National People's Congress Standing Committee began the fourth reading of a draft amendment to the Budget Law on Monday, in an attempt to rein in government power with tougher scrutiny of spending.

Effective supervision would see lawmakers involved earlier during the annual fiscal review, and they must look especially close at major spending items.

Government procurement must also be released with other spending when the government opens its budget to the public. Use of local debt is further narrowed to "spending related to public welfare", and risk assessment of local government debt is included again after being dropped in previous readings.

An Jian, a senior NPC official who explained the draft to fellow lawmakers, suggested a vote on Sunday, when the bimonthly session of the NPC Standing Committee is expected to conclude.

The Chinese government received 13 trillion yuan ($2.08 trillion) in revenue in 2013. Revenues are expanding at nearly twice GDP growth.

The current Budget Law was enacted in 1995, when China underwent a major reform to divide the revenue pie between central and local governments.

The law, which described its primary task as "strengthening macroeconomic control", barely mentioned fiscal transparency and soon became obsolete.

A revision started in 2004, but the draft "met strong resistance from the government for setting strict restrictions and supervision on revenue and spending" said Wei Sen, deputy director of the school of economics at Fudan University.

A compromise version was submitted in 2011 and received a whopping 330,000 suggestions from 19,000 people, and symposiums were held in Beijing and Shanghai to voice dissent.

"Fortunately, we've grabbed a good opportunity," said an NPC official in charge of the draft, referring to last year's Third Plenum at which fiscal reform was selected for comprehensive reform. Provisions to strengthen budget transparency, control of local government bonds and other issues were included in the draft.

"It is an improvement, to be sure, but a small one," said Liu Jianwen, a fiscal law professor at Peking University.

"The changes have made it easier for lawmakers to oversee government spending, but it does not empower them to change a specific arrangement in the budget. Instead, they can only approve or veto the budget as a whole," he said. "The road toward greater budget transparency remains tough."

An Baijie contributed to this story.

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