How many financial support staff are there?Crack the “land sale dilemma”, the central bank, the Ministry of Finance began to act

2022-04-19 0 By

Today the Paper published an article about the concept of “financial support personnel”.The author is Chen Jian, a special researcher at the China Society for Economic Reform.Financial support population, in a narrow sense, only counted as civil servants.Broadly speaking, it includes teachers, doctors, environmental health workers in public institutions, and people supported by provincial, prefectural, and even county finance.How big is it?Data from the Ministry of Finance in 2012 showed that there were 53.926 million people supported by local governments, in addition to a large number of quasi-financially supported people, estimated to total more than 10 million.By the end of 2014, more than 64 million people were actually supported by The Chinese government.Seven years on, how much bigger is it?The first step is to count people in public institutions.In 2014, the total number of civil servants in The country was 7.17 million. In the past seven years, the total number of civil servants in the country has increased by more than 100,000 to nearly 7.3 million.In addition, the total number of teachers increased by 2.76 million over 15.141 million in 2014, and the total number of health workers increased by 3.23 million over 2014, representing an increase of 6 million in seven years alone.The second step is to count the streets, communities and village committees.Statistics on civil affairs in 2020 show that China has 517,000 village committees, 111,000 communities, totaling 628,000 communities, and 3.76 million villager groups nationwide.Community and village committees were included in the scope of financial support in 2012, and villagers’ groups have been gradually included since 2014.Assuming that there are 8 people for each community and 2 people for each villager group leader, the newly incorporated population supported by the government will at least exceed 7.7 million.The third step is to calculate the new mechanism.This category mainly refers to the informal “temporary worker”, a typical quasi-financial supporting population, such as traffic assistants, urban management assistants and subway workers, which has also grown rapidly in recent years, with conservative estimates ranging from 3 million to 6 million.Add them all up, and over the past seven years, the number of financially supported workers has increased by about 16 million.Add in 64 million in 2014, and the answer is clear: there could be more than 80 million financially supported workers.Then, the key question is: where does the local finance money come from?Two words: land.In a December report, Bank of China International’s Zhu Qibing said: ‘As economic growth has slowed in recent years and fiscal security functions have increased, revenue from the sale of state-owned land use rights has become increasingly important in local finance.’By the end of 2020, revenue from the sale of state-owned land use rights once accounted for more than 44 percent of local governments’ broad fiscal revenue (budgetary revenue plus government-managed fund revenue).From January to October 2021, revenue from the sale of state-owned land use rights will still account for nearly 37 percent of local government revenue in the broad sense.Expenditures from the sale of state-owned land use rights accounted for more than 23 percent of local governments’ broad government expenditures (budgetary expenditures and government-managed funds).In other words, nearly half of local finance relies on land sales, or “revenue from land sales”.This forms the “land sale dilemma”.There is always a limit to urban expansion, and there is a limit to housing price rise, residents’ increasing leverage, and high turnover of housing enterprises. There is always a limit to land transfer.Creasy’s report shows that in 2021, the land market in 300 cities across China will transact 2.27 billion square meters of floor space, down 22 percent from 2020.The point is not just the decline, but the signal.It was the first time in the past five years that the size of land sales across the country fell.In 2020, even with the impact of the epidemic, land sales in China reached a staggering 2.91 billion square meters.29.1-22.7=6.4. In 2021, the total land sale scale in 300 cities will directly decrease by 600 million square meters.Assuming a flat of 100 square meters, 640 million square meters is 6.4 million houses, which is enough for 20 million people for a family of three.Demand for six million homes is gone.How to crack the dependence of local finance on land?This is a topic that people have been discussing for a long time without finding a solution.All in all, it is nothing more than “open source and reduce expenditure” these four words.We all know that reducing expenditure means nothing more than cutting fiscal expenditure and tightening our belts. In recent years, tax and fee cuts and expenditure cuts have been carried out.The key is “open source”, where to open?How are we going?In fact, the central bank and the Finance ministry already have a clear plan of action.The central bank mainly uses credit tools as a “baton” to promote industrial transformation.In November last year, the CENTRAL bank launched the carbon emission reduction tool, which will bring great financial support to key areas such as clean energy, energy conservation and environmental protection, and carbon emission reduction technology.Carbon reduction support tools are not just a new monetary base.It also means that the reconstruction of China’s monetary and credit system and the dual carbon and green economy will replace the role of real estate in the past and become the main incremental engine.The Financial Times reported at the end of January that banks that received the first batch of funds from the carbon-reduction support facility began to disclose information about their carbon-reduction loans and the amount of carbon reductions they generated, as required by the People’s Bank of China.Reporters learned that The China Development Bank received 10.267 billion yuan and the Agricultural Bank of China 11.368 billion yuan.By the end of the third quarter of 2021, the balance of green loans in China was nearly 15 trillion yuan, and the balance of green bonds exceeded 1 trillion yuan, ranking among the highest in the world.As long as money continues to flow to green economy, dual carbon related industries, it will only be a matter of time before we wean ourselves off property.As for the Ministry of Finance, the main task is to promote the trial of real estate tax to create new revenue channels for local governments.Last year, the top government made it clear that the real estate tax would be piloted for five years. When conditions are ripe, it will be implemented in a legal form across the country.According to the statement of the Ministry of Finance on the real estate tax in January, the real estate tax pilot will continue to be promoted in 2022, which is highly likely to be implemented.Some time ago, the Xiamen Bureau of Statistics removed an article, which explicitly mentioned “to do a good job of real estate tax pilot landing xiamen preparatory work”, has been a piece of imagination.In addition to several cities that participated in the real estate tax symposium last year, namely Shanghai, Chongqing, Shenzhen, Hangzhou, Suzhou and Jinan, the whole market has high expectations for the implementation of the real estate tax.Some economists have calculated that the current total market value of real estate is between 400 and 500 trillion yuan. Assuming that the tax rate for three or more sets is set at 5%, and assuming that the total market value of real estate remains unchanged, the tax source that can be leveraged is as high as 2.1 to 2.5 trillion yuan.There is a sentence blue and White feel quite right: days are problems on top of problems.Over the past decade, we have sought high growth and high efficiency, which inevitably led to “path dependence” on housing, land and debt.In the next decade, what we want is high quality, advanced, sophisticated and cutting-edge products. Industries will change, our thinking will change, and so will our sources of income.2022 is the best opportunity.