How can local finance operate smoothly and actively exert efforts—— Financial data from the mid year economic research tour | Local | Economic

Beijing, July 20th (Xinhua) - How can local finance operate smoothly and actively exert efforts—— Mid year Economic Research Tour - Finance Section

Xinhua News Agency reporter

On the 19th, the Ministry of Finance released data showing that in the first half of this year, the local general public budget revenue at the local level in China was 6531.9 billion yuan, a year-on-year increase of 13.5%. Industry insiders say that the significant increase in local fiscal revenue is mainly driven by base effects, in addition to economic recovery growth. Fiscal expenditures maintain rigid growth, and local fiscal operations show a tight balance.

How can local finance operate smoothly and actively in the face of a sustained tight balance of fiscal revenue and expenditure? During research conducted by Xinhua News Agency reporters in Liaoning, Hubei and other regions, it was found that various measures were taken simultaneously, and efforts were made to improve efficiency and implement proactive fiscal policies, playing a positive role in safeguarding people's livelihoods, stabilizing enterprises, and promoting development. At the same time, local finance departments adhere to the principle of retaining and suppressing resources, optimize expenditure structure, strengthen work efforts, and focus on promoting stable and sustainable fiscal operation.

Local fiscal revenue and expenditure continue to maintain a tight balance

"Since the beginning of this year, the overall situation of fiscal revenue in Anshan City has been good, and it is expected that the year-on-year growth rate of fiscal revenue in the first half of this year will reach more than 10%, achieving double-digit growth." said Wu Dan, Director of the Budget Department of Anshan City Finance Bureau in Liaoning Province.

When conducting research in Xiangyang City, Hubei Province, the reporter found that the fiscal revenue of this central city also increased by more than 10% year-on-year. "In the first half of the year, the general public budget revenue of local governments in the city reached 14.54 billion yuan, a year-on-year increase of 15.3%. Among them, tax revenue accounted for 73.4%, showing a clear upward trend," said Qin Jing, Deputy Director of the Xiangyang Municipal Finance Bureau.

Xue Xiqian, Deputy Director of the Treasury Payment Center of the Ministry of Finance, introduced that in the first half of the year, the revenue of the eastern, central, western, and northeastern regions increased by 12.8%, 10.7%, 17.5%, and 17.5% year-on-year, respectively, depending on the region. The income of 31 provinces has achieved positive growth year-on-year, with 10 provinces increasing by over 20%, 15 provinces increasing by between 10% and 20%, and 6 provinces experiencing single digit growth.

Several industry insiders and local finance professionals have also stated that although the data related to fiscal revenue has shown a recovery and recovery, the operation of local fiscal revenue and expenditure continues to be tight and balanced, and some counties and districts are facing financial pressure.

Wang Yun, Minister of Budget Preparation and Review Department of Liaoning Provincial Department of Finance, stated that with the improvement of economic recovery, local fiscal revenue has improved to a certain extent this year. The year-on-year growth rate of income is relatively fast, which is actually due to the lower base in the same period last year. Since the beginning of this year, due to the sluggish real estate and land markets, the revenue from land use rights transfer has decreased significantly, and the growth of local fiscal revenue remains under pressure.

"In fact, the operation of the government continues to face pressure of tight balance." Qin Jing calculated a "revenue and expenditure account" for reporters: in recent years, on the fiscal revenue side, the impact of the epidemic, tax and fee reductions, economic downturn pressure, etc. have all brought "revenue reduction" to the fiscal revenue; On the fiscal expenditure side, rigid expenditures such as stabilizing enterprises, safeguarding people's livelihoods, and promoting development will not decrease, and will continue to increase.

According to He Daixin, Director of the Finance Research Office of the Institute of Finance and Strategy at the Chinese Academy of Social Sciences, from a data perspective, fiscal revenue in multiple provinces has shown a recovery growth trend since the beginning of this year. However, local finance faces significant pressure on the actual operation of revenue and expenditure, and the rigid trend of fiscal expenditure remains significant. The pressure on fiscal revenue and expenditure balance is still significant.

Boosting efficiency in multiple regions and implementing proactive fiscal policies

The Central Economic Work Conference held at the end of last year and this year's government work report both clearly stated that proactive fiscal policies need to be strengthened and improved. Faced with the continuous tight balance of local fiscal operations, can proactive fiscal policies be implemented and effectively strengthened to improve efficiency?

During the investigation, the reporter found that in the context of high fiscal revenue pressure, various regions have persisted in optimizing their expenditure structure, implementing and optimizing tax and fee preferential policies, maintaining policy continuity and stability, further stabilizing enterprise expectations, and enhancing enterprise development confidence.

During the summer vacation, guests queuing up in the lobby of Yatai Hotel in Shenyang, Liaoning Province, with an occupancy rate of nearly 100%. "The hotel orders have been increasing continuously in the past two months, and it is estimated that they will peak in July and August." Liu Xiang, the owner of the hotel after 1990, couldn't conceal his joy in his tone.

Liu Xiang told reporters that in the past few years, hotel operations have been difficult due to the impact of the epidemic, but every year, enterprises can enjoy more than 200000 yuan in tax and fee preferential policies, helping them overcome difficulties. In the first five months of this year, hotels have enjoyed a total of 136000 yuan in value-added tax, property tax, urban land use tax, urban maintenance and construction tax reduction and exemption.

According to data from the Shenyang Municipal Taxation Bureau of the State Administration of Taxation, in the first four months of this year, Shenyang city added 2.49 billion yuan in tax reductions and deferred tax refunds, of which 410 million yuan was retained for value-added tax refunds.

Promoting consumption and stabilizing investment are one of the key directions of fiscal expenditure this year, and fiscal policies are actively focusing on expanding demand.

Liaoning has arranged a special bond fund of 4.9 billion yuan for local governments this year, focusing on supporting major transportation infrastructure projects such as the Shenbai high-speed railway and the Beijing Harbin expressway, as well as the construction of major regional medical and health projects; Guangxi will allocate a total of 25.442 billion yuan in funds for the first half of the year, focusing on key infrastructure such as ports, highways, and railways, and supporting the upgrading and incremental development of the western land sea new channel; The Finance Bureau of Anshan City has invested 10.8 million yuan this year to support the city in carrying out consumer activities for the benefit of the people and distributing electronic consumption vouchers to residents

"The financial departments in multiple regions have focused on expanding expenditure scale, accelerating operational efficiency, and played an important role in promoting economic recovery and improvement in the first half of the year," He Daixin said.

Taking multiple measures to ensure the smooth and sustainable operation of local finance

During the investigation, the reporter found that in the face of pressure and challenges, financial departments in many regions have strengthened their work, introduced a series of policy measures, strengthened grassroots "three guarantees", and focused on promoting the smooth operation of local finance.

In Anshan City, Liaoning Province, around the 6th of each month, all teachers and staff of Anshan No.1 Middle School will receive their full salaries on time.

"The annual salary expenditure of this school exceeds 23.593 million yuan, which is a priority guarantee." Wu Dan told reporters that when preparing the budget, Anshan City adheres to the principle of "retaining pressure" and prioritizes the full allocation of personnel salaries, basic operations, livelihood policy subsidies and other "three guarantees" expenditure budgets. At the same time, we will actively implement the management mechanism of the "Three Guarantees" special account, gradually incorporating wage related additional expenditure funds such as pension insurance, housing provident fund, medical insurance, and livelihood funds into the unified allocation and management of the "Three Guarantees" special account, ensuring that the national standard salary and additional policies are fully implemented.

Many regions have actively taken measures to firmly adhere to the bottom line of "three guarantees". This year, Nanzhang County in Hubei Province vigorously adjusted and optimized its fiscal expenditure structure, activated existing funds, reduced project expenditures, and prioritized various funds to ensure wage payments, institutional operations, and basic livelihood expenditure needs. The budget for "three guarantees" was fully guaranteed, with a total allocation of 2.776 billion yuan.

10.06 trillion yuan - This year, the scale of central to local transfer payments has reached a new high in recent years. According to Li Dawei, Deputy Director of the Budget Department of the Ministry of Finance, as of the end of June, the central government has issued 91.1% of transfer payments to local governments, and all eligible ones have been issued, providing strong financial support for local governments to do a good job in grassroots "three guarantees".

Faced with financial pressure, we insist on the government living a tight life. Liu Yong, Director of the Finance Bureau of Gucheng County, Hubei Province, said that the county regards diligence, frugality, and thrift as the basic principle for budget allocation, improves the standard for personnel quota of public funds, and vigorously reduces general expenditures. "This year, we have reduced expenditure on unit funding projects by more than 38 million yuan, with a reduction rate of 17%."

In terms of strengthening the management of local government debt, many regions have strengthened their efforts and introduced a series of policy measures. Jiangsu Province recently issued an implementation opinion on strengthening the construction of government integrity, stating that it will strengthen the construction of government integrity in the field of local government debt, improve the government debt supervision system, establish emergency response mechanisms and assessment and accountability mechanisms for local government debt. The Liaoning Provincial Department of Finance has made it clear that it will further improve the government debt management system, strengthen the full life cycle management of government bond projects, strengthen the supervision of financing demand side, resolutely curb the addition of implicit debt, and properly resolve existing debt.

He Daixin stated that from the later income trend, the overall recovery of China's economic operation will provide support for the growth of fiscal revenue. There is still sufficient room for fiscal growth and regulatory capacity. Through our own efforts and national policy support, it is possible to achieve stable and sustainable operation of local finance.