Core Insights - The Chinese government has been utilizing over 10 trillion yuan in transfer payments to address fiscal imbalances among regions and promote coordinated regional development [1] - Recent audit reports from 28 provinces have highlighted issues with the timely allocation, compliance, and rational distribution of transfer payments, indicating a need for improved regulatory oversight [1][2] Transfer Payment Issues - The overall scale of intergovernmental transfer payments in China is increasing, with central government transfers to localities projected at approximately 100.4 billion yuan for 2024 and 103.4 billion yuan for 2025 [2] - Many local governments are struggling with fiscal imbalances, leading to increased competition for transfer payments, which necessitates a more scientific and rational distribution of these funds [2] - Specific audit findings include: - Gansu's report noted a lack of management regulations for 26 projects and ineffective utilization of project reserves [2] - Hebei's report highlighted delays in revising funding management methods and unreasonable fund allocations affecting 10.74 billion yuan [2][3] Inefficiencies in Fund Allocation - Audit reports from various provinces revealed issues such as: - Shandong's report indicated that funds for smart city initiatives were distributed too broadly, with some eligible enterprises receiving only minimal support [3] - Anhui's report pointed out overlapping objectives among different special transfer payments, leading to inefficiencies [3] - Hunan's audit found that fixed distribution methods did not adequately address the needs of counties with significant fiscal gaps [3] Delays and Idle Funds - Delays in the allocation of transfer payments have been a recurring issue, with reports indicating that some funds were not distributed within the required timeframes, impacting budget execution and fund utilization [4][5] - For instance, Guangdong's audit revealed that 161.61 billion yuan in transfer payments exceeded the allocation deadline, with some delays lasting up to 334 days [4] - Idle funds due to slow project progress were also reported, with Hainan noting 8.04 billion yuan in unspent ecological protection funds [5] Regulatory Improvements - The Chinese government is working to enhance the transfer payment system and strengthen oversight to improve fund utilization efficiency [6] - Recommendations include optimizing the distribution methods for transfer payments, establishing evaluation mechanisms for regional balance, and ensuring timely fund disbursement [7][8] - Local audits have suggested reforms such as clarifying the functions of various transfer payments and implementing dynamic adjustment mechanisms to prevent fund wastage [8]

Core Insights - The Chinese government has allocated over 10 trillion yuan in transfer payments to address fiscal imbalances among regions, aiming for coordinated regional development and long-term national stability [2] - Recent audit reports from 28 provinces have highlighted issues with the timely distribution, compliance, and rational allocation of transfer payments, indicating a need for improved regulatory oversight [2][3] Group 1: Audit Findings - The overall scale of intergovernmental transfer payments is increasing, with central government transfers to localities projected at approximately 100.397 billion yuan for 2024 and 103.415 billion yuan for 2025 [3] - Some provinces reported inadequate management of transfer payment funds, with instances of funds being unallocated or misallocated, such as Gansu's report indicating 26 projects lacked management guidelines [3][4] - Audit findings from Hebei revealed that several funds were not allocated according to management guidelines, affecting the efficiency of fund usage [4] Group 2: Distribution Issues - Reports indicated that some transfer payments were distributed in a "one-size-fits-all" manner, leading to ineffective fund utilization, as seen in Shandong's report where funds were inadequately allocated to qualifying enterprises [4] - Inconsistent distribution methods were noted, with some regions relying heavily on fixed distribution bases, which did not adequately address the needs of counties with significant fiscal gaps [4][5] Group 3: Delays and Idle Funds - Delays in the distribution of transfer payments were common, with Guangdong's audit revealing that 46 central transfer payments exceeded the stipulated time limits, affecting a total of 161.61 billion yuan [5] - Idle funds were reported due to slow project progress and inadequate planning, with Hainan noting 8.04 billion yuan in idle ecological protection funds [6] Group 4: Misappropriation of Funds - Instances of misappropriation of transfer payment funds were reported, with Jilin's audit revealing that 25.45 billion yuan was misused for non-allocated purposes [7] - In Hebei, some local governments were found to have diverted special funds for budget balancing and daily expenses, totaling 7.88 billion yuan [7] Group 5: Regulatory Improvements - The Chinese government is working to enhance the transfer payment system and strengthen oversight to improve fund utilization efficiency [8][9] - Proposed measures include optimizing the distribution methods, establishing evaluation mechanisms for regional balance, and ensuring timely fund allocation in accordance with legal requirements [9][10] - Recommendations from local audits suggest further reforms in the fiscal system to clarify the functions of various transfer payments and improve performance monitoring [10]

Core Viewpoint - The article discusses the challenges and inefficiencies in China's intergovernmental transfer payment system, highlighting issues such as improper fund allocation, delays in fund distribution, and misuse of funds, while emphasizing the need for improved regulatory measures and system reforms to enhance the effectiveness of these payments [3][11][12]. Summary by Sections Audit Issues Overview - The scale of intergovernmental transfer payments in China has been increasing annually, with the central government's transfer payments to local governments projected at approximately 100.397 billion yuan for 2024 and 103.415 billion yuan for 2025 [4]. - Many local governments have reported issues with transfer payments, including untimely fund distribution, non-compliance with allocation regulations, and funds being left idle or misappropriated [3][5]. Specific Audit Findings - Various provinces have identified specific problems in their audit reports, such as Gansu's report indicating a lack of management regulations for 26 funds and ineffective utilization of project reserves [5]. - In Hebei, issues included outdated management methods for medical service funds and improper allocation of 10.74 billion yuan, affecting fund efficiency [5][6]. - Reports from Shandong and Anhui highlighted problems with scattered fund distribution and overlapping support content among different projects [6][7]. Timeliness and Utilization of Funds - The article notes that some transfer payments are not distributed in a timely manner, with Guangdong's report showing delays exceeding the stipulated time frame for 46 central and 23 provincial transfer payments, totaling 161.61 billion yuan [7][8]. - Idle funds remain a persistent issue, as seen in Hainan, where 8.04 billion yuan in ecological funds was left unspent due to slow project progress [9]. Misuse of Funds - Misappropriation of transfer payments has been reported, with Jilin's audit revealing that 25.45 billion yuan was misused for budget balancing and loan repayments [10]. - In Hebei, 7.88 billion yuan was improperly allocated to cover regular expenses instead of designated projects [10]. Recommendations for Improvement - Experts suggest that the transfer payment system needs reform to address inefficiencies, including optimizing fund distribution methods and establishing clearer evaluation mechanisms for fund allocation [12][13]. - The government has indicated plans to enhance the regulatory framework surrounding transfer payments, including the development of comprehensive regulations and performance evaluation systems [14][13].

Core Points - The European Union (EU) was formed in 1993, but many Eastern European countries have struggled to benefit from the unified market, often feeling marginalized [2] - Countries like Germany and the Netherlands have leveraged their manufacturing advantages to dominate Eastern European markets, leading to the decline of local industries [4] - The EU's financial support to struggling countries, such as Greece, has been insufficient and hindered by bureaucratic processes, resulting in limited benefits for the local population [4] - There is a clear hierarchical structure within the EU, with wealthier Northern countries benefiting disproportionately compared to Southern and Eastern nations [6] - The high welfare system in Europe is under threat due to rising energy costs, reduced military support from the U.S., and competition from upgraded Chinese manufacturing [6] - Cultural and ethnic differences among EU member states contribute to integration challenges, making it difficult to achieve a unified fiscal and policy framework [9] - The EU faces multiple crises, with Western countries reluctant to share responsibilities and Eastern nations unable to resist economic pressures, leading to a decline in welfare benefits [11] - The current situation in the EU serves as a cautionary tale for other nations, highlighting the importance of self-sufficiency and resilience in the face of external challenges [11]

1. Report Industry Investment Rating No information provided in the content. 2. Core Viewpoints of the Report - The core of the central - local fiscal relationship lies in the division and combination of powers over affairs, financial rights, and financial resources. Currently, there is a prominent mismatch between local financial rights and powers over affairs, leading to structural pressures. Future reforms may focus on cultivating local tax sources, the central government moderately taking back fiscal powers over affairs and expenditure responsibilities, and promoting fiscal system reforms below the provincial level [1][3][6] - Since the reform and opening - up, the central - local fiscal relationship has evolved from the "separate - cooking" system to the tax - sharing system, and then to the reform of powers over affairs and expenditure responsibilities [2] 3. Summary According to the Directory 3.1事权、财权、财力——财政体制三要素 - Powers over affairs determine the scope of action for governments at all levels, with the power of expenditure being the core. Financial rights mainly refer to tax rights and determine the revenue distribution among governments. Financial resources are the fiscal revenues that governments can organize and allocate, and are affected by transfer payments [1][10] - The theoretical understanding of the fiscal system has evolved. From the "two - factor" framework of "combining financial rights with powers over affairs" before the 1994 tax - sharing reform, to the requirement of "matching financial resources with powers over affairs" in 2007, and then to the principle of "aligning powers over affairs with expenditure responsibilities" after the 18th Third Plenary Session of the CPC Central Committee [12] 3.2央地财政关系的历史沿革 3.2.1 1979 - 1993年：分灶吃饭体制 - From 1979 - 1984, the "dividing revenues and expenditures, and implementing hierarchical contracting" system was implemented, giving local governments more fiscal autonomy. From 1985 - 1987, the "dividing taxes, verifying revenues and expenditures, and implementing hierarchical contracting" system was adopted, making the fiscal distribution relationship between the central and local governments clearer. From 1988 - 1993, the "six - form fiscal contracting" system was introduced, which further enhanced local fiscal autonomy [15][16][17] 3.2.2 1994年：分税制改革 - The "separate - cooking" system enhanced local government enthusiasm but led to a significant decline in the "two ratios." In 1994, the tax - sharing reform was carried out, with the core being the classification and distribution of taxes, forming a revenue - division system of central taxes, local taxes, and shared taxes. A transfer payment system was also introduced [19][22] 3.2.3 1994—2016年：分税制后央地间税权改革 - After the tax - sharing reform, the central government adjusted the division of financial rights mainly based on tax rights. Reforms were made in income tax, export tax rebates, securities transaction stamp duty, business tax, and value - added tax [23][24] 3.2.4 2016年至今：事权和支出责任改革 - Since 2016, the reform of dividing central and local fiscal powers over affairs and expenditure responsibilities has gradually advanced. Specific plans have been issued for major sub - sectors such as healthcare, education, and science and technology [27][28] 3.3央地财政关系的现状 3.3.1 地方财权与事权不匹配 - In terms of financial rights, the central and local tax revenues are nearly evenly divided. In terms of expenditure responsibilities, local governments bear most of the fiscal expenditures. In 2024, local fiscal expenditures accounted for 86%, while local fiscal revenues accounted for 54%, indicating a prominent mismatch [29][30][34] - From the perspective of the four - account fiscal structure, local governments have a large revenue - expenditure gap in the general public budget and rely on central transfer payments. The revenues and expenditures of government - managed funds and social security funds are mainly concentrated at the local level [37] 3.3.2 结构性的压力 - Local expenditure responsibilities are excessive, and local fiscal expenditures exceed national fiscal revenues. The gap has been widening since 2016, reflecting the structural problem of over - burdened local governments [39] - The expansion of local fiscal deficits mainly relies on central transfer payments. Since 2022, central transfer payments have exceeded central fiscal revenues, and the proportion of transfer payments in central fiscal expenditures and local fiscal revenues has been increasing [43][45] 3.3.3 央地财政关系的国际比较 - Compared with G20 countries, China has a relatively high proportion of local government powers over affairs and a relatively low proportion of central government powers over affairs. In 2022, local fiscal expenditures as a percentage of GDP were 22.28%, while central fiscal expenditures as a percentage of GDP were 21.1% [48] - In sub - sectors such as public services, economic affairs, health, and social security, local governments in China bear relatively heavy expenditure responsibilities [51] 3.4转移支付——财政均衡的纽带 3.4.1 转移支付构成 - Transfer payments include general transfer payments, special transfer payments, and transfer payments for shared fiscal powers over affairs. In 2024, general transfer payments (excluding transfer payments for shared fiscal powers over affairs) accounted for 49.5%, special transfer payments accounted for 8.1%, and transfer payments for shared fiscal powers over affairs accounted for 37.4% [55][56] - General transfer payments are mainly composed of equalization transfer payments, tax rebates, and rewards for county - level basic financial resources guarantee mechanisms. Special transfer payments are mainly used for infrastructure construction, and transfer payments for shared fiscal powers over affairs are mainly used in basic public service fields [59][61][64] 3.4.2 转移支付的区域分布 - Regionally, central and western regions receive significantly more transfer payments than other regions. They also have a higher degree of dependence on transfer payments. In 2024, Sichuan received the largest amount of transfer payments, while economically developed provinces and some less - developed regions received relatively less [66][67][70] 3.5央地财政关系改革的方向 3.5.1 培育地方税源、提高地方财政收入 - The reform of shifting the consumption tax collection link backward and gradually transferring it to local governments is being promoted. The potential incremental revenue from the reform is estimated to be about 20.93 billion yuan, but in the short term, it will have a limited impact on local financial resources [72][73] 3.5.2 中央适度上移财政事权和支出责任 - The central government may moderately take back fiscal powers over affairs and expenditure responsibilities in areas such as higher education, science and technology, public health, and social security to address the mismatch between powers over affairs and financial rights [76] 3.5.3 推进省以下财政体制改革 - Future reforms may include clearly defining fiscal powers over affairs and expenditure responsibilities below the provincial level, rationalizing the revenue relationship among governments below the provincial level, and improving the transfer payment system below the provincial level [78]

Core Viewpoint - The article emphasizes the importance of studying fiscal history to understand the underlying factors that shape modern states and societies, arguing that financial capabilities often determine the outcomes of historical events and conflicts [2][3][12]. Fiscal History Insights - Fiscal history helps to debunk grand narratives about the origins of modern states, highlighting the concept of the "fiscal-military state" as essential [3]. - In the late medieval period, royal finances were limited, relying on unstable sources such as land rents and tariffs, leading to temporary measures for war funding [4]. - The 16th century marked the beginning of a "long war era" in Europe, compelling states to find more stable financing methods [5]. - The Glorious Revolution in England (1688) led to parliamentary control over finances, establishing a national debt system and the Bank of England, which enabled sustained military engagement [6]. - France's fiscal structure was flawed, with tax burdens disproportionately on the common people, leading to high debt costs and eventual state bankruptcy, which contributed to the French Revolution [7]. - During the Napoleonic Wars, Britain leveraged its global capital markets and efficient tax systems to finance prolonged conflicts [8]. Case Studies in Fiscal Capacity - The Crimean War (1853-1856) is framed as a test of fiscal capacity, with Britain and France having established robust debt markets, while Russia's reliance on serfdom and limited domestic capital led to its defeat [9]. - The fiscal crisis in Russia prompted significant reforms, including the abolition of serfdom and the establishment of a modern fiscal and economic system [9]. Broader Implications of Fiscal History - Fiscal history reveals that financial resources directly influence the success of wars and have profound effects on social structures and national identity [12]. - Economic historian Joseph Schumpeter's insights suggest that a nation's fiscal history encapsulates its cultural and social dynamics, providing a clearer understanding of historical developments [12][13]. - Schumpeter posits that modern nations and national identities are shaped by fiscal pressures, indicating that taxation plays a crucial role in state formation [14][15]. Historical Context in China - The early Republic of China faced significant turmoil, attributed to a weak fiscal foundation, with the central government heavily reliant on tariffs and external debts, leading to fragmented political power [16][18]. - The fiscal decentralization trend began in the late Qing dynasty, with local powers retaining tax revenues, which contributed to the political fragmentation observed during the early Republic [17]. - The establishment of the Nationalist government in 1927 aimed to unify fiscal authority, but true fiscal centralization was not achieved until after 1949, with significant reforms occurring in the 1990s [18]. Conclusion - Understanding fiscal history, alongside population history, is crucial for grasping the true pulse of historical developments and societal changes [19].

Core Viewpoint - The article highlights the increasing pressure on China's economy due to the pandemic and geopolitical conflicts, leading to significant fiscal challenges, particularly at the county level, while emphasizing the government's efforts to ensure basic livelihood support through increased transfer payments from the central government [1][2]. Group 1: Fiscal Challenges and Responses - China's economy faces downward pressure this year, exacerbated by repeated pandemic outbreaks and international geopolitical conflicts [1]. - The central government has significantly increased transfer payments to local governments, reaching a record high of nearly 9.8 trillion yuan in 2022, with an increase of approximately 1.5 trillion yuan, marking an 18% growth from the previous year [1][2]. - The fiscal report indicates that the central government's transfer payments are crucial for maintaining basic livelihood support and ensuring the implementation of tax reductions and exemptions [2]. Group 2: Transfer Payment Mechanism - The central government allocated 1.2 trillion yuan in transfer payments specifically to support local governments in implementing tax cuts and ensuring basic livelihood needs [2]. - The transfer payment system is evolving, with a focus on enhancing the efficiency of fund utilization, particularly through a direct funding mechanism that allows for rapid disbursement to local levels [3][4]. - As of mid-year, approximately 3.992 trillion yuan of the 4 trillion yuan allocated for direct funding has been disbursed, achieving a 97.9% distribution rate [4]. Group 3: Impact on Local Governments - Local governments are also enhancing their financial support by coordinating central subsidies with their own resources, particularly focusing on financially weaker municipalities [2]. - The direct funding mechanism has proven effective in alleviating financial pressures at the grassroots level, ensuring that basic livelihood needs are prioritized in budget allocations [5]. - Direct financial support has reached approximately 3,500 billion yuan, benefiting around 680,000 businesses and a total of 2.56 million instances of support [4][5].

Core Viewpoint - The concept of "secondary finance" and "tertiary finance" in discussing China's regional economic issues, particularly in Jiangsu, is widely misunderstood and oversimplified [1][4][7]. Group 1: Understanding Jiangsu's Fiscal System - Jiangsu's 13 prefecture-level cities, including Nanjing, are often described as having a "secondary finance" system, directly connecting with the central government without provincial mediation [2][3]. - This perception of Jiangsu's fiscal structure as entirely "secondary finance" is a significant misconception [4]. - To comprehend Jiangsu's fiscal system, a broader understanding of China's fiscal hierarchy is necessary, which consists of five levels: central, provincial, prefectural, county, and township [6]. Group 2: Taxation and Revenue Distribution - China transitioned from a fiscal package system to a tax-sharing system, where the central and local governments share tax revenues, significantly enhancing central government finances while weakening local government finances [8]. - In Jiangsu, the provincial tax revenue is only 23.11 billion, while the total provincial revenue reaches 7642.03 billion, indicating that provincial revenue constitutes a mere 0.3% of the total [12]. - The "lower-level revenue sharing" in Jiangsu is substantial, with 2055.39 billion received from lower-level governments, which is about eight times the provincial revenue [12][13]. Group 3: Unique Fiscal Logic in Jiangsu - Jiangsu's fiscal model operates on a "package logic" where cities retain most of their revenue after meeting provincial obligations, contrasting with the tax-sharing logic seen in other provinces [15]. - The proportion of local fiscal revenue retained at the city level in Jiangsu is 77.02%, higher than in Guangdong and Zhejiang [16]. - Recent government initiatives aim to reform Jiangsu's fiscal system to align more closely with the national tax-sharing model, moving away from the unique "package logic" [16][17].

Core Viewpoint - The article emphasizes the importance of income distribution structure in relation to consumption promotion and economic growth, suggesting that improving the redistribution mechanism can stimulate internal consumption and drive economic growth [1][2]. Economic Growth and Income Distribution - The relationship between macro income distribution structure and economic growth is a long-standing research theme, where the distribution of income among enterprises, government, and households influences consumption and investment, thereby affecting economic growth [4]. - A reasonable income structure that covers different income levels can create a diversified consumer market, promoting economic optimization and upgrading [4]. Current State of Income Distribution in China - China's household disposable income as a percentage of GDP is significantly lower than that of major economies, with 60.8% in 2022 compared to Japan (70.3%), Germany (69.5%), and the US (84.9%) [5][6]. - The proportion of disposable income has been persistently lower than the initial distribution since 2000, indicating an unreasonable redistribution mechanism [7]. Policy Recommendations - Policies should focus on increasing transfer payments to households, optimizing government spending structure, and enhancing tax reforms to stimulate consumption [3][11]. - Short-term transfer payments are essential for boosting consumption demand, especially in underdeveloped regions [9][10]. - Long-term improvements in the transfer payment system are necessary to address regional economic imbalances and enhance disposable income [12]. Consumption Structure and Government Spending - The article advocates for increasing government spending in the livelihood sector to shift economic demand towards consumption, particularly in services [16][17]. - The current fiscal expenditure structure favors construction over services, necessitating a reallocation to enhance market supply and related investments [17][18]. Tax Reforms and Pension System - Tax reforms should address structural contradictions in the economy and enhance consumer capacity, including raising the personal income tax threshold and lowering rates for middle and low-income groups [19][11]. - Increasing tax incentives for personal pension accounts can improve the overall pension replacement rate, thereby enhancing current consumption tendencies [20]. Fiscal Policy and Debt Management - There is significant room for increasing government debt and deficit levels, with a current debt ratio of 65.7%, allowing for potential fiscal expansion to support consumption [22][23]. - The article suggests that issuing special government bonds can help bridge funding gaps while balancing consumption and investment needs [25][26].

文/ 中欧国际工商学院经济学与金融学教授、中欧陆家嘴国际金融研究院高级学 术顾问 盛松成 稳增长政策应重视收入分配结构与促消费、稳增长的关系。在已有研究的基础 上，分析宏观收入分配结构对经济增长的影响，并针对我国居民可支配收入占 比低、再分配调节不够合理、民生领域支出有待增加等实际情况，从增加居民 部门可支配收入、提高边际消费倾向、引导需求结构向消费倾斜等方面，提出 一系列政策建议。 2024年我国顺利实现经济社会发展预期目标，全年GDP同比增长5.0%，其中四季度增长5.4%，为年内最高增速，成绩来之不易。但也要看到，很多积极 变化只是初步的，仍须夯实经济回升向好的基础。随着外部环境不确定性加大，内需重要性将更加突出，尤其是消费将在今年经济增长中扮演更重要的角 色。从2024年底召开的中央经济工作会议看，政策着力点也将更多转向惠民生、促消费。 由于居民和政府两大部门在收入分配中的份额及其消费支出在很大程度上直接决定了一个经济体的消费发展水平，完善再分配机制，可能是激发消费内生 动力、促进经济增长的一把"钥匙"。"再分配"是指政府或公共部门通过税收、社会保障、财政转移支付等政策工具，对初次分配（往往是由市场机 ...