The first annual forum on China's fiscal reform opened in Beijing on Tuesday, aiming to address the ways in which the reforms can be made most beneficial to the poor.

"China has made enormous progress in economic and social development in recent decades," said Khalid Malik, UN Resident Coordinator and UNDP Resident Representative in China.

"However, the depth and coverage of China's fiscal reform progress have been uneven, and there is scope for strengthening the links between fiscal reforms and poverty reduction goals," said Malik.

"From growth-orientation to promoting greater equity, fiscal policy must play a central role in this shift," he stressed.

As the country registered robust economic growth of 10.7 percent in the first three quarters, the Chinese central government will adopt a more prudent fiscal policy to restrain government expenditure, control deficits and increase revenue, according to the Ministry of Finance.

"Taxation, as an important instrument of macro-economic management, should and will play a more active role in balancing urban and rural development, regional equalization, reducing unemployment and environmental protection," said Wang Li, deputy director of the State Administration of Texation (SAT).

China has set aside 14.2 billion yuan in subsidies to arable farmers this year, with 14.18 billion yuan already allocated by October 20, according to official data.

Another 23.5 billion yuan was used to subsidize county and township governments in an effort to improve their financial capability.

The forum was set up as part of a 10.3-million-U.S.dollar project, established by the Chinese government and the UNDP, with the aim of implementing national fiscal policies more effectively at local levels.