Presenters:

Xu Xianping, Vice Minister of the National Development and Reform Commission; Huang Ming, Vice Minister of Public Security; Liu Kun, Vice Minister of Finance; Yang Zhiming, Vice Minister of Human Resources and Social Security; Wang Shiyuan, Vice Minister of Land and Resources and Qi Ji, Vice Minister of Housing and Urban-Rural Development

Date:

March 19,2014

Introduction:

The press conference concerns the National New Urbanization Plan (2014-2020) which was issued on Sunday, March 16.

Die Welt: I have two questions. The first is about expenses. We see from the analysis from the central authorities that it costs between 60,000 and 130,000 yuan to convert one person's hukou (household registration). How did you come up with that figure? Who is going to pay for the expenses? Second, you mention at the beginning that the World Bank is your advisory body. What advice have you taken from the World Bank? Thank you.

Xu Xianping: Liu Kun, vice minister of Finance, will answer the first question.

Liu Kun: Securing funds is important for the process of urbanization, and we address it mainly by making institutional innovations. We will speed up the reform in the financial and taxation system and the investment and financing mechanisms, make innovations in financial services, open up market access, and build a diversified and sustainable financial guarantee mechanism.

Regarding granting urban residency to people from the countryside who have moved to cities, the Ministry of Finance has improved its balanced transfer payment method, taken the migrating population into account when estimating regional fiscal spending, in order to resolve the discrepancy in public services between the areas that the migrants are leaving and arriving in, which is caused by the floating population. We will follow the principles laid out in the Decision of the Central Committee of the Communist Party of China on Some Major Issues Concerning Comprehensively Deepening the Reform during the Third Plenary Session of the 18th Central Committee of the Communist Party of China, and the National New Urbanization Plan (2014-2020), establish a mechanism linking fiscal transfer payments with the urbanized agricultural population, further improve the fiscal transfer payment system, and promote equitable and universal public services including social security, medical treatment, education, culture and so on.

The Ministry of Finance will mainly deal with the following things in terms of securing capital for urbanization: first, it will reinforce the power of local government bonds in promoting urbanization, give more rights to local governments to issue bonds in accordance with the law, improve the current system of local government bonds, and explore a means of local government bond issuing that combines general and special bonds. Second, it will promote the cooperative model of government and social capital, or the PPP model, in which the government, by means of franchise rights, fair pricing, fiscal subsidies and other open and transparent measures, clarifies the benefit-cost mechanism in advance and attracts social capital to participate in the construction of urbanization infrastructure. Third, it will further strengthen the management of local government financing companies, regulate the local government borrowing, sort out the relationship between enterprises and governments, correctly guide market expectations, and prevent and diffuse financial risks.

Xu Xianping: Let me add one thing. As Vice Minister Liu mentioned just now, the government pays for part of the expenses incurred from the transfer of the rural population to urban areas. Apart from that, enterprises and rural migrant workers are also responsible. For instance, enterprises should pay for the rural migrant workers' social security, and invest in their skills training. Rural workers themselves should also pay a part of the costs according to the relevant rules and regulations. Hence, the expense is shared by governments, enterprises and individuals. The governments are responsible for the public cost.

As to what advice the World Bank and the Asian Development Bank gave when we drafted the Plan, they mainly focused on energy conservation and environmental protection, building smart cities, raising the management level of city planning and construction, improving social security and so on. We have studied and adopted the advice.