(Yicai Global) Jan. 15 -- China's  national budget will undergo contraction via bigger tax breaks, as well  as expansion via more local government bonds and more frugal spending  this year. 

China will perform a "larger scale" tax  cut, while combining inclusive breaks of levies and structural reforms  to lessen financial burdens on its manufacturing industry, as well as  small and micro-sized enterprises, Xu Hongcai, an assistant minister of  the Ministry of Finance, said at a press briefing today. 

The finance ministry will appropriately raise fiscal expenditures according to the economic situation and various demands. 

Local governments are allowed to raise  more money via issuing bonds to support major construction projects.  However, this does not mean that debt management will become more  relaxed, Xu said. 

Some expenditures are necessary, such as  those related to poverty alleviation, agriculture, structural  adjustments, technological innovation, environmental protection, and  people's livelihood, Xu said, adding that some other types of expenses  need to be pruned.

The government must control its spending  regarding travels and vehicle purchases to cut spending by more than 5  percent, as well as eliminate inefficient use of money to focus on areas  that need more economic stimulus, according to Xu. 

Editor: Emmi Laine