1China’s Macroeconomy in 2010 1
1.1An overview of China’s National Economic Performance in 2010 1
1.1.1The Economic Growth Continued， Although at a Slightly Slower Rate 1
1.1.2 Agricultural and Rural Economy Kept Stable Development， and Farmers’ Incomes Increased Rapidly 3
1.1.3 Industrial Production Recovered With Significantly Improved Effi-ciency 7
1.1.4 Investment in Fixed Assets Slowed Down， but the Real Estate Market Remained Overheating 14
1.1.5 Total Retail Sales of Consumer Goods Increased Steadily ， Rural Consumption Still Lower Than Urban Consumption 18
1.1.6 Foreign Trade Achieved a Rapid Recovery Growth With Signifi-cant Export Expansion From Central and Western Regions 19
1.1.7 Soaring Prices Intensified Inflation Concerns 21
1.1.8 Monetary Policies Returned to Normal， and Foreign Exchange Re-serves Kept Growing 25
1.1.9 Stock Market Capitalization Continued to Grow ， While Range of Share Price Drop Ranked Third in the World 30
1.1.10 A Positive Trend of Employment Was Accompanied by Increases in Residents’ Income 33
1.2 Major Issues of China’s Macroeconomy in 2010 35
1.2.1Sharp Rise in Food Price Caused General Escalation of Prices and Increasing Inflationary Pressure 36
1.2.2 Continuous Rising in Real Estate Price Made Housing Unafford-able for Ordinary People 41
1.2.3 Overinvestment ， Underconsumption and Unstable External De-mand Made Up Irrational Engines of Economic Growth 43
1.2.4 The Industrial Structure Was Imbalanced and the Progress of In-dustrial Upgrading Remained Very Slow 48
1.2.5 Unreasonable and Unbalanced Distribution Pattern of National In-come 51
1.3 Analysis of Major Macroeconomic Policies in 2010 55
1.3.1Continuing to Implement a Proactive Fiscal Policy and a Moderate-ly Easy Monetary Policy 56
1.3.2 Curbing Rocketing Housing Prices and Squeezing Out Bubbles in the Market by Drastic Actions 59
1.3.3 Facilitating the Growth of Emerging Industries and Supporting the Development of Regional Economy 61
1.3.4 Encouragement of Private Investment by Central and Local Gov-ernments 65
1.3.5 Promoting Energy Saving and Emission Reduction and Accelera-ting Elimination of Backward Production Capacity 70
1.4 Macroeconomic Trend in 2011 73
1.4.1Steady Economic Growth Can Be Expected， but Growth Rate Will Decrease Slightly 73
1.4.2 Efforts to Restructure Economy and Stabilize Growth Will Bear Fruit 76
1.4.3 Income Distribution Reform Is on the Way， Social Security Work Has Been Steadily Advanced， and People’s Lives Will Be Fur-ther Improved 78
1.4.4 As Excessive Liquidity Remains a Serious Problem and InflationPressures Intensifies Further， China Will Shift to a Prudent Mo-netary Policy 80
1.4.5 The Pace of RMB Appreciation Will Remain Modest 81
2 China’s Fiscal Revenue in 2010 83
2.1Review on Fiscal Revenue Achieved in 2009 83
2.2 Analysis of Fiscal Revenue in 2010 88
2.2.1Overview of 2010 Fiscal Revenue Budgeting and Implementation 88
2.2.2 Analysis of Total Fiscal Revenue in 2010 93
2.2.3 Analysis on the Structure of Fiscal Revenue in 2010 96
2.3 Analysis of Major Tax Policies in 2010 108
2.3.1Goods and Services Tax Policies 108
2.3.2 Income Tax Policies 114
2.3.3 Special Preferential Tax Policies 117
2.4 Major Tax Reforms during the Eleventh Five-Year Plan Period 124
2.4.1Abolition of Agricultural Tax 125
2.4.2 Unification of Income Tax on Domestic and Foreign Enterprises 127
2.4.3 VAT Transformation 128
2.4.4 Sales Tax Reform 129
2.4.5 Adjustment of Individual Income Tax 131
2.5 Review on Treasury Bonds Issued in 2010 132
2.5.1The Volume of Treasury Bonds Issued 132
2.5.2 Types of Treasury Bonds 135
2.5.3 Maturity of Treasury Bonds 142
2.5.4 Coupon Interest Rates 146
2.5.5 Local Government Bonds Issued 150
2.6 2011Fiscal Revenue and Policy Outlook 152
2.6.1Assessment of 2011Fiscal Revenue Situation 152
2.6.2 Comments on Tax Policies Already Issued in 2011 154
2.6.3 An Outlook of Treasury Bonds to Be Issued in 2011 157
3 China’s Fiscal Expenditure in 2010 160
3.1Review on the Implementation of 2009 Expenditure Budget 160
3.1.1Implementation of Budgetatry Expenditures by the Central Govern-ment 160
3.1.2 Implementation of Budgetatry Expenditures by Local Governments 165
3.2 Scale of Fiscal Expenditures in 2010 166
3.2.12010 Fiscal Expenditure Budgeting and Implementation 166
3.2.2 Analysis of Total Fiscal Expenditures in 2010 168
3.3 Structure of Fiscal Expenditure in 2010 173
3.3.1General Structure of Fiscal Expenditure in 2010 173
3.3.2 Major Items of Fiscal Expenditure in 2010 177
3.4 Fiscal Expenditures Under the Principle of People’ s Livelihood Finance 197
3.4.1Definition of People’ s Livelihood Finance 197
3.4.2 Development of Basic Fiscal Operation Mode Requires the Imple-mentation of People’s Livelihood Finance 200
3.4.3 Implementing People’s Livelihood Finance Is the Requirement of Preventing Public Crises 202
3.4.4 Fiscal Expenditures Under the Principle of People’ s Livelihood Finance 203
4 Analysis on China’ s Public Finance by Constructing Econometric Models 213
4.1Overview 213
4.2 Fundamental Ideas， Methods and Data Used in Constructing the E-conometric Model 214
4.3 Settings of Econometric Models for China’ s Public Finance 217
4.3.1Settings of Models for Fiscal Revenues 217
4.3.2 Settings of Models for Fiscal Expenditures 218
4.3.3 Settings of Models for Economic Growth and Its Components 219
4.4 Application Results of Econometric Models for China’ s Public Fi-nance 219
4.4.1Analysis on Modeling Results of Fiscal Revenue 220
4.4.2 Analysis on Modeling Results of Fiscal Expenditures 229
4.4.3 Analysis on Modeling Results of Economic Growth and Its Compo-nents 234
4.5 Predictions on China’ s Major Fiscal and Macroeconomic Indicators 239
4.6 Conclusion， Implication and Limitation 241
References 243