The central government's tax rebates and transfer payments to local governments. The central government turned over 2.294561 trillion yuan in tax rebates and transfer payments to local governments in 2008, an increase of 480.772 billion yuan or 26.5%, representing 106.1% of the target. This total consists of 428.219 billion yuan in tax rebates, up 3.9%, 869.649 billion yuan in fiscal transfer payments including general transfer payments, a 22% increase, and 996.693 billion yuan in special transfer payments, a 44.6% increase. The large increase in this last item was mainly due to the huge increase in expenditures required to subsidize key local programs such as education and medical and health care. Tax rebates and transfer payments turned over to local governments became part of the revenue of local governments, which made arrangements for their utilization. Transfer payments from the central government accounted for an average of 38% of local government spending nationwide and 54.4% in the central and western regions.

Revenue of local governments totaled 5.159052 trillion yuan, an increase of 988.001 billion yuan or 23.7%, equivalent to 106.4% of the target. This consists of 2.864491 trillion yuan collected by local governments and 2.294561 trillion yuan in tax rebates and transfer payments from the central government. Local government expenditures totaled 4.999265 trillion yuan, an increase of 1.079057 trillion yuan or 27.5%, equivalent to 103.1% of the target. This total consists of 4.905272 trillion yuan spent by local governments and 93.993 billion yuan turned over to the central government. Revenue exceeded expenditures, leaving a surplus of 159.787 billion yuan, which mainly came from the surplus revenue in the central and local budgets that was not spent and will be rolled over into local budgets this year.

In addition, revenue from government-controlled funds nationwide totaled 1.563635 trillion yuan, an increase of 446.72 billion yuan or 40%. Expenditures from these funds came to 1.49847trillion yuan, representing an increase of 530.026 billion yuan or 54.7%.

Revenue from the funds controlled by the central government reached 252.566 billion yuan, an increase of 78%. This large increase was mainly attributable to profits from the sale of lottery tickets coming under budgetary control and strong growth in revenue from the foreign exchange funds controlled by the central government. Total revenue includes 20.259 billion yuan from the fund for developing the Three Gorges Project, 55.504 billion yuan from the fund for developing railways, 9.621 billion yuan from civilian airport administration and development fees, 9.148 billion yuan from port development fees, 14.87 billion yuan from the fund for providing continuing aid to residents relocated to make way for the construction of large and medium-sized reservoirs, 34.814 billion yuan in profits from the sale of lottery tickets, and 68.491 billion yuan from operations of the foreign exchange funds controlled by the central government. Added to the 55.987 billion yuan from 2007, total revenue came to 308.553 billion yuan. Expenditures by the central government from funds under its control totaled 205.672 billion yuan, an increase of 94.5%. This includes 20.456 billion yuan from the fund for developing the Three Gorges Project, 62.1 billion yuan from the fund for developing railways, 5.313 billion yuan from civilian airport administration and development fees, 10.185 billion yuan from port development fees, 20.547 billion yuan taken from profits from the sale of lottery tickets to support social welfare programs, sports, education and other public service programs, and 68.287 billion yuan from operations of the central government foreign exchange fund. Added to the 46.489 billion yuan in subsidies for local governments from the fund for providing continuing aid to residents relocated to make way for the construction of large and medium-sized reservoirs and the 56.392 billion yuan rolled over into this year, total expenditures amounted to 308.553 billion yuan.