BEIJING, June 9 -- China will set up a special transfer payment mechanism to ensure that fiscal funds can directly benefit businesses and people, according to a State Council executive meeting Tuesday.
Under the mechanism, the country will increase transfer payments from the central government to local governments, and arrange transfer payments from government-managed funds, said a decision adopted at the meeting chaired by Premier Li Keqiang.
The mechanism will be in place to ensure that funds go straight to prefecture and county governments in a timely manner, the decision said.
China has decided to cut taxes and fees by another 2.5 trillion yuan (about 354 billion U.S. dollars) for enterprises this year. As the move might put local governments under financial strain, the country will grant a total of 2 trillion yuan of fiscal funds to ensure the implementation of these supportive measures at the primary level.
While arranging the use of funds, local governments should give priority to poverty reduction efforts to make sure that the poverty alleviation goals be achieved this year, the meeting said.
The meeting also decided to roll out more measures to ease the difficulties of the country's foreign trade companies, which employ nearly 200 million people.
The country will encourage foreign trade firms to explore more international markets while simplifying procedures for them to sell goods to domestic customers, according to the meeting.
Financial institutions were encouraged to step up credit support for foreign trade firms, the meeting said.
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