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May 31 - China will start a trial budget of earnings1 of state-owned enterprises (SOEs) under the supervision2 of central government within this year, the State Council decided3 at a meeting on Wednesday chaired by Premier4 Wen Jiabao.
With the budget, the state would obtain the earnings from state-owned assets as the owner of enterprises, and spend the money according to the budget plan. The earnings included in the budget would be channeled to support the government's planning for industrial development, restructuring national economy, technological5 renovations of companies, compensating6 SOEs with huge structural7 reform expenses, and supplementing the social security fund, said the premier. Wen said the special budget system was an important step in the income distribution reform of state-owned enterprises, and would help companies improve technologies and competitiveness, adding the government's macro-economic control would be strengthened as well. The earnings of the SOEs would satisfy the needs of enterprises for their development, and only a proportion of total earnings would go into the budget. The proportion should be set at a reasonable level to ensure the needs of both, Wen said. The budget of SOE earnings would be planned independently from the government's main public spending budget. The new budget would be carried out at the local level according to the plans of local governments.
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