In order to support enterprises to reduce their burden, protect people’s livelihood and alleviate the contradiction between fiscal revenue and expenditure, according to the 2022 budget report, this year, the Ministry of Finance used 1650 billion yuan of profits handed over by specific state-owned financial institutions and franchised institutions.
The relevant person in charge of the Ministry of Finance disclosed that it is China’s customary practice to arrange specific state-owned financial institutions and franchised institutions to turn in profits. It is also an important means of coordinating financial resources and adjusting funds across years, including the people’s Bank of China, China National Tobacco Corporation and China Investment Corporation. The people’s Bank of China revealed that the balance profit turned over to the central finance according to law this year exceeded 1 trillion yuan.
What funds can the finance co-ordinate? How strong is the overall financial planning ability?
explain the funds that can be used as a whole
If only from this year’s budget report, simply add up the expenditure of the national general public budget, government fund budget, state-owned capital operation budget and social security fund budget (hereinafter referred to as the “four accounts”) in 2022, the total scale of fiscal expenditure is about 50 trillion yuan. Of course, excluding the repeated part of the expenditure of the four accounts, the scale will be slightly smaller, However, the scale of funds that can be used in an overall way can be seen, and it is far from so.
Professor Wang Yongjun, director of the government budget research center of the Central University of Finance and economics, told first finance that all “government revenue” and “government financing” belong to available financial resources, that is, public resources that usually need to be included in the budget. China’s sources of financial funds are quite diverse, including the “four accounts” such as the general public budget, the budget stability adjustment fund, the people’s Bank of China and the profits of some state-owned enterprises. In terms of categories, it includes not only tax income and non tax income, but also debt and asset disposal.
“The content of non tax income is very miscellaneous. It can be said that those that cannot be included in tax, debt and equity income from the transfer of state-owned assets can be classified as non tax income and placed in the government fund budget. For example, the profits handed over by the central bank this time belong to non tax income and are included in the government fund budget.” Deng Shulian, a professor at Shanghai University of Finance and economics, told first finance.
The profits of 1650 billion yuan turned in by the above-mentioned specific state-owned financial institutions and specialized institutions have also been included in the income of central government funds.
In addition to the regular revenue, the government has a lot of resources to make overall use of. Taking the general public budget account book as an example, in addition to the general public budget revenue (mainly tax), the transferred funds and carried forward balance funds in 2019, 2020 and this year exceeded 2 trillion yuan, such as about 2.3 trillion yuan this year.
Professor Li Yan, director of the Institute of budget management of the Central University of Finance and economics, told China first finance and economics that in recent years, with the superposition of economic downturn, epidemic impact, tax reduction and fee reduction and other factors, fiscal revenue has continued to decline and the contradiction between revenue and expenditure has been increasing. Therefore, how to make overall use of financial resources is a high-frequency word, including the overall coordination of four budgets, the overall coordination of cross annual budgets All kinds of income and their overall use, and the overall use of financial stock funds. In recent years, the use of financial co-ordination funds is increasing, and the methods of co-ordination are also increasing, including the unusual large-scale profit handed over by the central bank. In the general public budget books in recent years, it can often be seen that trillions of carry forward surplus funds are used.
Li Yan explained that the surplus funds refer to the funds remaining after the actual amount of budget revenue is deducted from the actual amount of budget expenditure and the funds carried forward at the end of the implementation of the annual budget. According to the regulations, the carry forward funds not used up in the general public budget and government fund budget for two consecutive years are also managed as surplus funds. The surplus funds can be used to stabilize and adjust the fund through supplementary budget, and then used for new budget arrangements.
In general public budgetary account income, it is also common to transfer funds from the budget stabilization fund, the government fund and the state-owned capital operating budget “two accounts”. For example, in the general public budget revenue of the central government this year, 276.5 billion yuan was transferred from the central budget stability regulation fund, and 900 billion yuan and 90 billion yuan were transferred from the “two accounts” of the central government fund budget and the state-owned capital operation budget respectively. The large scale of funds transferred from the central government fund budget this year is related to the aforementioned use of the profits turned over by specific state-owned financial institutions and franchised institutions.
Li Yan said that the budget stability adjustment fund plays a regulatory role of “reservoir”, and the income mainly comes from excess income and surplus funds. In order to strengthen the overall planning of the general public budget, both the government fund budget and the state-owned capital operation budget will have funds transferred in, and there are corresponding proportions or regulatory requirements. For example, the central government requires that the proportion of operating income of state-owned capital transferred into the general public budget should reach 30% by 2020. This can avoid the circulation of the operating income of state-owned capital in the body of state-owned enterprises, and more is used to meet the general public needs, so that Lbx Pharmacy Chain Joint Stock Company(603883) enjoy the fruits of the development of state-owned economy.
Deng Shulian said that the state-owned capital operation budget is prepared and implemented by the SASAC, and the state-owned enterprises managed by the SASAC are only part of all state-owned enterprises in China. Some state-owned enterprises are outside the jurisdiction of SASAC. For example, specific financial institutions are under the management of the Ministry of finance.
use the profits of specific institutions such as the central bank
If we look at the source of real funds through the transfer in or use of carry over balance funds, this year’s central government will undoubtedly be a highlight of this year’s financial planning work by using the profits handed over by specific state-owned financial institutions and franchised institutions in accordance with the law. Among them, the profit of more than 1 trillion yuan paid by the central bank according to law has attracted more attention from the outside world.
The central bank publicly explained that the balance profit mainly comes from the operating income of foreign exchange reserves in the past few years, which will not increase the burden of taxes or economic entities, nor is it a fiscal deficit. The people’s Bank of China turns over the balance profits to the central finance according to law, which will not cause the finance to overdraw from the central bank. The balance profits were handed over in a balanced manner on a monthly basis, and the scale of the balance sheet of the people’s Bank of China remained stable, reflecting the coordination and linkage of monetary and fiscal policies and making joint efforts to stabilize the macro-economic market.
Li Yan said that in practice, there is a close relationship between China’s finance and finance. In the early stage of reform and opening up, there was a case of financial deficit and borrowing from the central bank to make up for it, which is actually overdraft. In the case of insufficient financial funds, this practice is easy to lead to financial instability and inflation. Therefore, the later “people’s Bank of China Law” stipulates that the people’s Bank of China shall not overdraw the government’s finance, nor directly subscribe for and underwrite national bonds and other government bonds. In terms of the relationship between finance and the central bank, it is stipulated that the income of the people’s Bank of China in each fiscal year minus the expenditure of that year, and the net profit after withdrawing the total reserve according to the proportion approved by the financial department of the State Council shall be turned over to the central finance, and the loss shall be made up by the central finance allocation.
\u3000\u3000 “It is in line with the laws and regulations that the central bank turns over the profits to the finance, which is also the common practice of the world’s major economies, and will not cause the finance to overdraft from the central bank. Moreover, the turned over profits mainly come from the operating income of foreign exchange reserves in the past few years, which is guaranteed, and this part of the deposited profits are paid in a balanced manner on a monthly basis. In practice, the financial expenditure is also paid on a monthly basis rather than a monthly basis Therefore, according to China’s regulations that the central bank manages the Treasury and the setting of a single treasury account, this fund can still exist in the banking system and will not affect the liquidity of banks and financial stability.
”Li Yan said.
Wang Yongjun believes that the detailed information of the profits handed over by the central bank has not been published in the budget documents over the years. In essence, the profits handed over by the central bank are not financing to make up the fiscal deficit, but an integral part of the “government revenue” itself, because the central bank belongs to the government department under the current system. This turned in profit will have an impact on the financial situation and operation of the central bank, but will not affect the financial situation and operation of the “government as a whole”.
Deng Shulian said that unlike the financing method of issuing 1 trillion yuan of special anti epidemic treasury bonds in 2020, this fund needs to repay the principal and interest. The profits turned in by specific financial institutions such as the central bank, franchised institutions and state-owned enterprises are the income obtained by the government as an owner without increasing the social burden.
Shi Wenwen, a professor at China University of political science and law, told China first finance and economics that the use of trillions of yuan of profits from the central bank actually moved some of the government’s “family assets”. There are many government land assets and state-owned assets, which also shows that the government has more resources available, including fiscal policy, still has space and strong anti risk ability, which also reflects the superiority of the social system.
Many experts suggested that we should further increase the openness and transparency of the budget, so that Lbx Pharmacy Chain Joint Stock Company(603883) can more clearly understand the context of relevant overall planning funds, so as to accept social supervision.
In recent years, all localities are promoting the establishment of an accrual based government comprehensive financial reporting system to comprehensively and accurately reflect the government’s financial status and operation, disclose the complete government “family background” to the society, improve the level of financial management and financial transparency.
