Revenue in the central budget will reach 3.806 trillion yuan, an increase of 216.386 billion yuan or 6% over the figure for 2009 (here and below). The central budget stabilization fund will contribute 10 billion yuan, bringing total revenue to 3.816 trillion yuan. Expenditures in the central budget will reach 4.666 trillion yuan, an increase of 275.886 billion yuan or 6.3%. This total consists of 1.6049 trillion yuan of central government spending, an increase of 76.916 billion yuan or 5%, and 3.0611 trillion yuan of tax rebates and transfer payments to local governments, an increase of 198.97 billion yuan or 7%. Expenditures in the central budget will exceed revenue, resulting in a deficit of 850 billion yuan, an increase of 100 billion yuan. With a corresponding increase in the volume of government bonds issued, the limit for the outstanding balance of government bonds issued by the central government will be 7.120835 trillion yuan.

Local government revenue will amount to 3.587 trillion yuan, up 10.1%. Added to the 3.0611 trillion yuan of tax rebates and transfer payments from the central government, total local government revenue will be 6.6481 trillion yuan, an increase of 527.896 billion yuan or 8.6%. Local government spending will amount to 6.8481 trillion yuan, an increase of 788.72 billion yuan or 13%. Expenditures will exceed revenue by 200 billion yuan, and the Ministry of Finance will issue 200 billion yuan of government bonds on behalf of local governments, subject to the approval of the State Council, and incorporate the funds into provincial-level government budgets. Total combined revenue of central and local governments is budgeted at 7.393 trillion yuan, an increase of 8%. Adding 10 billion yuan from the central budget stabilization fund, total national revenue is projected to reach 7.403 trillion yuan. Total national expenditures are budgeted at 8.453 trillion yuan, up 11.4%. Total expenditures will exceed total revenue by 1.05 trillion yuan.

The national budget deficit is estimated at 2.8% of GDP in 2010, basically the same as last year. This figure is mainly based on the following considerations. Although China's economy is showing signs of turnaround, its foundation is still not solid, and we therefore need to maintain continuity and stability in our fiscal policies. Due to the small increase in revenue and immense pressure on expenditures, the disparity between them is significant; therefore, the deficit for 2010 has to remain at an appropriate level. At the same time, in order to promote the sustainable development of public finance, actively fend off financial risks, and leave some leeway to gradually reduce the deficit in future years, we must keep the deficit under 3% of GDP.

Overview of the central budget stabilization fund. The outstanding balance of the fund stood at 11.9 billion yuan at the end of 2009. After 10 billion yuan is transferred to the 2010 budget, 1.9 billion yuan will remain.