[EpochTimesAugust192022](Reported by Epoch Times reporters Ning Haizhong and Luo Ya) Chinese Premier Li Keqiang appeared in Guangdong a few days ago and held a symposium with the principals of the governments of 6 major economic provinces in Shenzhen, naming 4 coastal provinces To complete the “turn in tasks”. In recent years in mainland China, the saying that “six provinces and three cities support the whole country” has become popular, that is, the rich provinces help the poor ones. However, in the first half of this year, all 31 provinces and autonomous regions recorded fiscal deficits, and the big economic provinces themselves could not be guaranteed.
Experts said that Li Keqiang broke the rules and directly held meetings with local governments, showing distrust of the system. The local government cried out to Li Keqiang for poverty, but the official media did not report it. In addition, Li Keqiang is actually difficult to save the Chinese economy.
Li Keqiang asked the major economic provinces to take the lead
On August 16, when Li Keqiang presided over a symposium with the principals of the government of major economic provinces in Shenzhen, he emphasized that the major economic provinces should take the lead. The six major economic provinces (Guangdong, Jiangsu, Zhejiang, Shandong, Henan, Sichuan) account for 45% of the country’s total economic output and are the “pillars”. He also named four of the coastal provinces (Guangdong, Jiangsu, Zhejiang, and Shandong) to complete the task of turning over their finances.
Hong Kong’s “Electric News” published a commentary article on the 19th, saying that the saying “six provinces and three cities support the whole country” has become popular in the mainland in recent years, referring to 6 provinces and 3 municipalities (Guangdong, Shanghai, Beijing, Jiangsu, Zhejiang, Shandong) in 2019. , Tianjin, Fujian, Liaoning), the national fiscal surplus is about 3.3 trillion yuan (RMB, the same below), and the remaining 22 provinces are all in deficit, relying on the central “fiscal transfer” (from “rich provinces” to help “poor provinces”) maintain operations. (Data from China Fiscal Year Supervisor). However, in the first half of this year, all 31 provinces and autonomous regions recorded fiscal deficits. If there is no strong rescue policy and relaxation of epidemic prevention restrictions, the “economic province” may not be able to protect itself.
Luo Zhiheng, chief economist of Yuekai Securities, and Xu Kaizhou, a macro researcher of Yuekai Securities, jointly commented on the Chinese website of the Financial Times on August 9. They mentioned that, calculated based on the difference between income and expenditure, most provinces in the first half of this year The fiscal gap widened from the same period last year. The fiscal gaps of Zhejiang and Guangdong have changed from RMB 20.5 billion and RMB 161.8 billion in the same period last year to RMB 125.2 billion and RMB 291.2 billion respectively. Shanghai, which used to be “outstanding”, has a financial gap of 1.8 billion yuan, and the balance of revenue and expenditure is the first time in history that it has a negative value in the same period.
According to official data, Guangdong, Zhejiang, Jiangsu and Shandong recorded deficits of 291.2 billion, 125.2 billion, 249.3 billion and 210.9 billion respectively in the first half of the year. Sichuan Province, which has the worst deficit, has a fiscal revenue of 247.9 billion yuan in the first half of this year, but an expenditure of 617.3 billion yuan, a shortfall of 369.4 billion yuan.
Local fiscal deficits are mainly financed by central transfer payments and local debts. According to data from the Ministry of Finance of the Communist Party of China, transfer payments from the central government to local governments are expected to reach nearly 9.8 trillion yuan in 2022, the largest scale in history; transfer payments in the first half of the year increased by 1.5 trillion yuan year-on-year, an increase of 18%, the highest growth rate in recent years.
According to an article in the Hong Kong Economic Journal, in May this year, Li Keqiang held a “National Video and Telephone Conference on Stabilizing the Economic Market” in Beijing, and reportedly told local governments across the country: “I will also give you a bottom line here, unless there are more In the event of a catastrophic natural disaster, there is still a total reserve fund, and the rest of the money depends on your place.”
With the outbreak of the new crown epidemic again this year, the authorities’ adherence to the zero-epidemic prevention policy, and the turmoil in the real estate market, China’s economy is declining, and local financial constraints are frequently signaled: Dancheng, Henan has been unable to pay driver wages for many consecutive months. Buses are suspended; Boluo County, Huizhou, the only one of the top 100 counties in Guangdong Province, has reduced shifts due to operational difficulties of public transport companies; Leshan, Sichuan sold off the main revenue right of the Giant Buddha Scenic Area in the next 30 years for 1.7 billion yuan; Langzhong, Sichuan auctioned public schools at one time 30-year canteen management rights for 175 units including 175 units.
In the wave of salary cuts for civil servants in many parts of the country, it also includes rich provinces and cities such as Guangdong, Jiangsu, and Zhejiang.
Scholar: Li Keqiang held a meeting and the official media did not report local difficulties
Before hosting a symposium on major economic provinces in Shenzhen on August 16, Li Keqiang also hosted a video symposium for the heads of the five southeastern coastal provinces and cities in Fujian on July 7, attended by Fujian, Shanghai, Jiangsu, Zhejiang, and Guangdong. , the latter three provinces are also “economic provinces”. At that time, Li Keqiang pointed out that the five southeastern provinces accounted for nearly 40% of the fiscal revenue, and contributed nearly 80% of the local government’s net transfer to the central government, which strongly supported the national financial resources and the central government’s transfer payments to the central and western regions.
Davy Jun Huang, an economist based in the U.S., told The Epoch Times on August 19 that the CCP’s official media coverage of Li Keqiang’s meeting was half reported but not half reported, not bad news. The reports are all nonsense, saying that Li asked the 4 major coastal economic provinces to complete the task of turning over their finances, and the 6 major economic provinces should help enterprises to bail out their efforts to stabilize employment and stabilize foreign trade, etc. A closer look is just a goal, even a vision, without specifics. There is no specific direction for the measures.
“The key is that various places cry poor and report difficulties. This is not reported. This is the key point. We often see this situation in China. Generally, closed-door meetings are not open to the public.”
Huang Dawei said that the real situation of this meeting is that Li bypassed the inherent system of reporting layer by layer, and directly learned the most practical situation from the major economic provinces, then summarized and studied the next economic policy, and also personally and directly informed the major provinces of the current situation. Taking economic development as an urgent task.
“This time, various localities reported their actual difficulties to Li Keqiang, because in the past, provinces and cities did not report their work directly to the central government or the State Council. He reported to the competent department and passed it on. Therefore, the direct report to Li Keqiang this time is true. Because they often change the data, they change it once in the province, and change it again when they go to the ministry.
David Huang said that Li Keqiang had previously held a “National Video and Telephone Conference on Stabilizing the Economic Market” in Beijing attended by 100,000 officials, and the last two meetings at the local level have actually bypassed the central ministries, commissions, offices, and bureaus to connect with local governments. “Iron rules”, direct instructions to the lowest level of government. Since the establishment of the Communist Party of China, this kind of breaking the inherent channel of the upper and lower is very rare, and it is a practice in a special period, suggesting that the current domestic economic situation is not optimistic.
David Huang also said that in the past, the Prime Minister of the State Council usually did not directly issue orders to provinces and cities, but usually arranged for the National Development and Reform Commission to issue orders from the State Council’s ministries, commissions, offices, and bureaus. Li Keqiang actually did not trust the system.
Analysis: Li Keqiang can’t save China’s economy
Xia Yeliang, a scholar in the United States and a former professor at the School of Economics of Peking University, told The Epoch Times on August 19 that the Chinese economy has been on a downward trajectory in the past ten years. Whether it is real estate or the stock market, it has been a complete failure, and the people have no money in their hands. , the money is concentrated in the hands of the powerful. After some private entrepreneurs became bigger, the CCP took wealth from private entrepreneurs.
“Now that every industry is not good, where will employment come from? After Shanghai was closed for a few months, Shanghai’s economy has been hit hard. Now Xi and Li Keqiang are two completely different people. Li Keqiang went to clean up the mess and wanted to pass some economic power. The place to drive and boost China’s economy. This is equivalent to a clever woman who can’t cook without rice.”
He believes that China’s economy will not see any bright spots in the short term. Now, for the convening of the 20th National Congress, we may rely on the official media to brag, but it is actually very difficult.
At the meeting on August 16, Li Keqiang also provided suggestions for the achievement of tasks by major economic provinces. He pointed out at the symposium: “The reason why major economic provinces have achieved today’s development achievements is the fundamental driving force of reform and opening up. We must continue to be brave in reform. Explore and deepen the reform of delegating power, delegating power, regulating services…”
Xia Yeliang said that Li Keqiang’s talk about reforms is actually empty talk, because Li Keqiang clearly knows that Xi Jinping is getting closer to the Mao Zedong era, not more and more open economically, let alone politically.
“The word reform has been abused now. Many words in China have fundamentally changed from their original meaning. For example, the rule of law that the Chinese government talks about is fundamentally deceiving. Now the entire political system is tightening, thinking In retrogression, how can you have reforms?”
Xia Yeliang believes that some of Li Keqiang’s speeches and some of his local efforts are not reported by the official media. The scope of his influence is quite limited, so don’t have expectations for Li Keqiang.
Responsible editor: Gao Jing#