China's counties face fiscal challenges

BEIJING - County-level governments are facing financial challenges in the form of revenue shortages and poorly managed expenditures, Minister of Finance Xie Xuren said on Wednesday.

Tougher reforms are needed to increase county government revenues, Xie said while delivering a report at a bimonthly session of the Standing Committee of the National People's Congress, the country's top legislature.

County governments in some places have hired new staff too quickly and are not spending enough on public services, Xie said.

According to Xie, the general budget revenue reached 2.43 trillion yuan ($382.5 billion) in 2011, 1.7 times that of 2009, with an average annual increase of 30.4 percent.

The minister of finance said that the general budget revenue in 819 poor counties, as classified by by the financial ministry, reached 312.4 billion yuan in 2011, 133.2 billion yuan more than that of 2009, with an average annual increase of 32 percent.

The number of counties in poverty listed by the financial ministry had reduced to 113 by the end of 2011 from 819 in 2009, and the money needed by them decreased to 9.3 billion yuan from 89.4 billion yuan during the same period, according to Xie.

In 2011, the money provided by the central governments to county-level governments reached 2.63 trillion yuan, 1.53 times of that in 2009.