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China's Minister of Finance Lou Jiwei takes questions from journalists at a news conference during the ongoing two sessions in Beijing, March 6, 2015. [Wang Jing chinadaily]

China's Finance Minister on Friday denied rumor that the government spent 300 billion yuan ($47.9 billion) on public vehicles, receptions and trips.

"It is nonsense to say that," said minister Lou Jiwei at a press conference.

Public funds for government vehicles, officials' overseas trips and official receptions are known as "three public funds."

The central government's expenditure of the funds was 7.1 billion yuan last year, 800 million yuan lower that that of 2013, he said. "The funds for this year would not exceed last year's level."

Lou said he was not clear about the use of funds in local governments, but he estimated the total figure would be dozens of billion yuan, rather than "300 billion yuan" as rumored.

Here are other highlights of the press conference.

Proactive fiscal policy

China's Minister of Finance Lou Jiwei (second of left) takes questions from journalists at a news conference during the ongoing two sessions in Beijing, March 6, 2015. [Wang Jing chinadaily]

"We must adopt a moderately expansionary fiscal policy in coping with downward pressures, as we de-leverage the economy step by step while preventing it from nose-diving," Lou said.

Signs of recovery in world economy are not obvious enough, including that in the United States, said Lou, adding that China will be affected by such "new normal" of the world economy.

Personal income tax

The government will loosen taxes charged on enterprise annuity to support the fragile pension system encumbered by an aging population.

It's not fair to raise the threshold for personal income tax, Minister of Finance Lou Jiwei said.

Lou also acknowledged drawbacks in the taxation system in regard to personal income, while responding to a question whether more tax cuts are expected to drive consumption needs.

Pension

While strengthening the management and reform of mandatory social pension, the ministry has also implemented tax preference policies that support enterprise annuity.

Pilot programs have been carried out on adopting EET model in pension system. "The ministry will work with China Insurance Regulatory Commission to raise a nationwide plan," Lou said.

Asian Infrastructure Investment Bank

The offer of being a founding member of the Asian Infrastructure Investment Bank (AIIB) is still open but the ball is in Japan's court, Lou said.

The chance to be an AIIB founding member is available for all Asian countries including Japan by March 31, Lou said.

"They told us they are considering. Whether Japan will join, we do not know. It is Japan's own decision," he added.

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