Financial Difficulties At The County Level In China And The Solutions

The reform of the tax system in 1994, while clarifying the central and provincial relationship between fiscal decentralization, but it is not expected to play a role on straightening out the financial system below the provincial, making the county level in China's economy has continued to be increasingly difficult with our country's sustained economic development and the continuous improvement of financial situation. There are more than 2000 counties existing in our country, concentration of more than 70% of the national population and creating more than 56% of GDP, nearly 1/4 of the fiscal revenue and nearly 1/3 of the financial expenditure to achieve is adopted at the county level. In some places, the gap of county government revenue and expenditure is so large that it requires the adoption of higher levels of government transfer payments to make up, more than 40% of county-level administrative region deficit exist. County-level operation of the financial situation not only directly affect the county's economic development and county-level fiscal balance, but also to grass-roots political organization-building and the consolidation and the overwhelming majority of China's well-being of vulnerable groups, related to the country's economic development and social stability, throughout the country significant financial implications.Therefore, the research of financial difficulties at the county level and countermeasures is of great practical significance.From the overall situation, based on a large number of scholars of the theory of the financial difficulties, the author make a comprehensive analysis of the current situation at the county level financial status and role, sort out the financial situation of our country at the county level, from abroad at the success experience of the development of county-level financial, give countermeasures and proposals to alleviate the financial plight of Chinese county-level.This article is divided into six parts:Part I: This is divided into introduction, analysis of the research background of this thesis, as well as the basic framework of meaning.Part II: This article related to the institute by virtue of the basic theory and the causes of financial difficulties at the county level in China and the research of countermeasures, introduced the main theory of fiscal decentralization, public finance and transfer payments. Since the 20th century, fiscal decentralization has become a very common phenomenon in the world, to establish scientifical system of democratic decentralization has become an inevitable trend and a reasonable selection. By the use of fiscal decentralization theory, to carry out a profound analysis of the reasons of the current financial difficulties at the county level in China, in order to address the financial difficulties of the grass-roots level to provide a solid theoretical basis. Public Finance Theory has laid a foundation to correctly handle the relationship between government and market and provides a theoretical basis for the right to define the scope and functions of the Financial Activity Spaces. With the development of socialist market economy, China has clearly set up the financial reform of public finances, building a socialist framework of public finance has become inevitable choice to alleviate the county-level financial plight of China. At present China is in the initial stage of combining the theory and practice of transfer payments, the establishment of a sound scientific and standardized system of transfer payments is an effective tool.to resolve the county level financial difficulties.Part III: This part is the discourse of regarding Chinese county-level financial status and role. Based on looking back at Chinese county-level financial system changes in general has gone through three stages (the financial system of high concentration of the "EC EC branch closed", "lump sum" financial management system, tax system), have the analysis of the different effects generated by different stages of the financial system at the county level economy, derived the relationship between finance and the economy: economic decisions finance, finance also counter-productive economic. After the Party Plenum, the new socialist countryside construction comes into depth, focused on the county level plays an important role in the provision of rural finance public goods and a leading role in building a new socialist countryside, and finally summed up the county level of national economic development throughout the financial status and role.Part IV: This part is about the summary of the financial situation of our country at the county level. Through combing the system at the county level of the basic financial situation, to draw the conclusions that the county level financial are general difficult, the financial situation of the country at the county level is divided into three levels; "dinner" type of finance, "begging" type of finance, "destitute" type finance, the division is based on the difference of the extent of financial difficulties. And then analysis from an economic, historical, policy, politics, management and other factors, economic factors: county-level economic base is relatively weak, a single structure; historical factors: the burden of financial debt at the county level is increasingly heavy; policy factors: incremental reduction of the central policycentral are introduced frequently; political factors: the transformation of government functions at the county level lags and government agencies and personnel expansion; management factors: county-level government departments make policy failures, irregularities in budget management,the concept of the rule of law is not strong,the collection and management of tax revenue is in non-standard sources; natural factors: uneven distribution of natural resources, different natural conditions. Cited a variety of financial difficulties at the county level performance: the county level financial revenue are in small scale, poor quality, structure is irrational, severely inflated revenue, the obvious contradiction between revenue and expenditure at the county level, and the gap, and a deficit of a wide range of heavy debt burden at the county level , pressure on the financial risk increasing and focus on the economic system from the system, the administrative system and financial system to analysis of the causes of difficulties.Part V: This part is about the success of the development of county-level experience in financial in other countries of the world. American financial system: The United States is typical of a federal country, and its financial system to implement three-level management: federal financial, state financial and local financial, the division of powers among governments at all levels has a clear legal requirements, and subject to legal restriction and supervision, by way of division of tax rates at all levels of government divided between the major types of taxes, mainly use the classified funding transfer payments forms, local government can only attach conditions to the special transfer payments;Germany financial system:Germany is a federal country,the implementation of federal, state and local management at different levels of the financial system, the Federal Republic of Germany has also developed a "financial balance method", for re-allocation of revenue to provide a legal basis to form their own characteristics with fiscal balance mechanism; Indian financial system: at the revenue side, tax reform, opening up new sources of tax revenue, reforming the tax structure, tax hike part of measures to increase fiscal revenues, the central financial authority delegated substantial financial expenditure side, the strict control of financial expenditure, streamlining government agencies and personnel, reduce administrative operating costs ; to gradually reduce, removal of subsidies; adjust state-owned shares to reduce the investment of public enterprises, the central government to state governments through various forms such as transfer payments.Part VI: This part is the basic way and countermeasures to solve the financial difficulties at the county level. Mainly from the county economy, county level of debt, financial system, financial supervision,the four major aspects to propose a solution, hoping to alleviate the current financial difficulties at the county level play a role. In the development of county economic areas: changing concepts in line with local conditions, to play county resources to vigorously develop the tertiary industry and individual and private economy, a solid foundation of agriculture, accelerate agricultural modernization, the revitalization of industry, taking a new road to industrialization, improving the market system, Optimize economic environment, good investment; at the county level to resolve debt: government debt statistics set up a sound system and norms of government debt management mechanisms; at improving the financial system: to further standardize the transfer payment system and rationalizing the distribution relations, and deepen the financial management system reform; in strengthening financial supervision aspects: strengthening the National People's Congress and its Standing Committee, the audit of the financial supervision authorities to strengthen the financial sector oversight of government borrowing, the Government at the county level to the management and use of financial resources to carry out full supervision and direction, improve public financial oversight mechanism.