The "New Normal" Of China'S Finance: Passive Buying As An Active Invitation

It is necessary to scientifically define the boundaries of financial functions, strengthen the management of budget implementation, revitalize the stock of financial stocks, further improve the efficiency of the use of financial funds, and finance must turn to passive payment and take the initiative to entertain guests.

Wang Zecai, a researcher from the Institute of Fiscal Science of the Ministry of finance, told the Economic Observer newspaper that last year's central economic work conference put forward the "new normal" of China's economy from nine aspects: consumer demand, investment demand, export and balance of payments, production capacity and industrial organization, relative factors of production factors, market competition characteristics, resource and environment constraints, accumulation and resolution of economic risks, resource allocation mode and macro-control mode.

Changes in the domestic economic situation and international situation,

From 10% to 7%, the middle and low speed has shifted from extensive speed to extensive growth.

The economic structure will be pferred from incremental expansion to the growth of stock adjustment and increment.

Wang Zecai believed that these backgrounds gave birth to a new financial norm.

In fact, as early as the end of 2014, at the national financial work conference, Lou Jiwei, Minister of finance, asked for financial work under the new normal.

Lou Jiwei stressed that the important performance of the new normal financial situation is that under the new normal economic development, the financial revenue has changed from high speed growth to medium and low speed growth.

Gao Peiyong, President of the Chinese Academy of Social Sciences and director of the Institute of financial strategy, said: "China has never established a mechanism for automatically reducing fiscal expenditure with the decline in revenue.

In fact, in sharp contrast to the decline in fiscal revenue growth, there has been no substantial reduction in the growth of fiscal expenditure.

Also said, "after the issuance of the guidance document No. 43 of the State Council, the issue of local financing has become a widespread concern of local governments. Many places have vigorously introduced the PPP mode, which is a reflection of the aggravation of the contradiction between revenues and expenditures under the new normal financial situation."

At the end of 2014, the Ministry of Finance announced the list of the first PPP demonstration projects, a total of 30 projects, with a total investment of 180 billion yuan, of which 22 were local financing platform company stock projects.

The NDRC and CDB jointly issued the notice in March 17th. All localities should strengthen coordination and make flexible use of all kinds of financial instruments such as fund investment, bank loans, issuing bonds and so on, so as to promote the establishment of a PPP project capital guarantee mechanism with time matching, cost saving and diversified sustainability.

Chen Jingdong, general manager of Xiangyang construction investment and Management Co., Ltd., Hubei, told the Economic Observer newspaper that from the policy point of view, the measures taken by the NDRC and CDB to promote PPP have been very strong.

The loan interest rate of the CDB itself is not high, and the loan period of some projects can be as long as 30 years. Such a policy will be of great help to further promote the landing of PPP projects.

However, Chen Jingdong is also worried that PPP projects that can really enjoy the above preferential policies should be few.

In addition to the key public welfare projects such as shed reform and safe drinking water projects supported by the state, it is difficult to estimate such conditions for most other PPP projects.

Wang Zecai believes that the new normal fiscal situation will last for more than five years.

The key is to revitalize the stock.

Under the "new normal" of finance, if we want the finance to play its due functions, we must achieve it through reform and establish a modern financial system.

At present, the main task of fiscal reform is to improve and improve budgetary management, taxation system, and establish responsibilities and expenditure responsibilities.

Therefore, the task of fiscal reform in 2015 is very arduous.

At the end of last year's national financial work conference, Lou Jiwei stressed that we should overcome the speed complex and prevent it from wasting our lives.

Lou Jiwei put forward that the first is to look at the growth rate of revenue in a realistic way.

It is necessary to scientifically estimate fiscal revenue and prevent excessive financial revenue budgeting.

The financial departments must not accept "overheads" and "arbitrary charges" when the economy slows down and the income growth rate falls. This will increase the burden on enterprises and form a pro cyclical adjustment to the economy.

Two, we must resolutely prevent and correct fiscal "idling" behavior.

In order to strictly implement the relevant requirements of the new budget law, we must conscientiously organize and carry out clean-up inspections, seriously investigate and deal with the "idling" behavior of the financial sector, and maintain a sound financial and economic operation order.

The three is to promote the benign interaction and healthy development of Finance and economy.

Income is no longer a rigid task requirement. It does not mean that the trend of income growth will not change.

However, the Economic Observer learned that in 2014, when the downward pressure of the economy was huge, the land tax department would pay the tax that had not been collected before, so as to complete the tax task in 2014.

In addition, the idling phenomenon is much more in the West now, because the pressure of income is too great. In some provinces in the West and southwest in 2014, the growth of non tax revenue will be reduced by one percent points.

A related tax official said.

According to Gao Peiyong, according to the general public budget revenue caliber, in 2014, the national fiscal revenue was 14 trillion and 34 billion 974 million yuan, an increase of 8.6% over 2013, compared with the GDP growth rate of 7.4% in the whole year.

However, behind this surface phenomenon is the increasingly prominent problem of fiscal deficit.

"China's tax revenue is mainly based on the turnover tax, and the income tax income tax and property tax are relatively low, and the financial revenue is higher than that of the GDP growth.

The important performance of the new financial norm is that the growth of the future fiscal revenue will decline sharply, and the number of units will grow from double-digit growth to the rigidity of expenditure, which will lead to a continuous expansion of the deficit.

The above tax related people said.

In terms of expenditure, education, technology and agriculture accounted for 7 of the total fiscal expenditure in 2012, reaching 48%.

Vehicle purchase tax, urban maintenance and construction tax and other special funds and government debt interest payments and defense spending accounted for more than 15%.

This shows that most of the expenditure on fiscal revenue is rigid.

Statistics released by the Ministry of finance also show that in the past 2011-2014 years, the growth of general public budget revenue in China is 25%, 12.9%, 10.2% and 8.6% respectively.

The budget for 2015 was 7.3%.

The downward trend of tax revenue growth has been very obvious.

Gao Peiyong said, "8.6% of the fiscal revenue growth is achieved in the context of a series of special measures, including the increase of profits from some financial institutions."

By contrast, during the "11th Five-Year" period, the national fiscal revenue increased by 21.3% annually, which is nearly 10 percentage points higher than the GDP growth rate over the same period.

Even after entering "12th Five-Year", in 2011, the national fiscal revenue growth rate once reached 25%.

It slipped from 25% to 8.6% in 2014, only 3 years.

"This year, the rate of decline has further accelerated.

In January, the national revenue growth was only 3.4%.

Moreover, if we pay attention to the normal state of fiscal revenue in the past year, we should strive to achieve a comprehensive tax reduction of 400 billion yuan or so, and further tax cuts for small and micro enterprises.

Under these conditions, it is easy to imagine the difficulty of completing the budget target of 7.3% of the national revenue growth this year.

Gao Peiyong said.

In Wang Zecai's view, China's investment in infrastructure will continue to increase this year compared with previous years, with the real estate investment continuing to be deeply callback.

Income growth at medium to low speed, but expenditure is a rigid growth.

Medical and health expenditure, wage expenditure, housing provident fund and social security, education and so on are rigid expenses. Because of the consolidation of expenditure base, some expenditures need to deepen fiscal reform.

Wang Zecai said that there are two ways to solve this problem: first, play a positive fiscal policy, increase deficits and expand spending, stimulate the economy through tax reduction; two, change the way of public goods supply, and make up for the demand of rigid expenditure through PPP (government and social capital cooperation) mode and government purchase services.

Under the pressure of increasing financial revenue and expenditure, revitalize financial stock funds is regarded as the most favorable means to solve the current income and expenditure problems.

For the revitalizing of stock funds, the State Council and the Ministry of finance only made three recommendations in the first quarter of 2015. The most recent was Premier Li Keqiang, who chaired the executive session of the State Council in April 1st, to deploy and co-ordinate the use of the deposited fiscal funds to effectively support the economic growth; to revitalize the deposited stock of funds to co-ordinate the development of the key areas and weak links needed to develop, so as to improve the efficiency of the use of funds and better play the role of the active fiscal policy in steady growth and structural adjustment.