Insight into the meaning of China's additional issuance of 1 trillion yuan of treasury bond in 2023
2023-10-25
On the 24th, the sixth meeting of the Standing Committee of the 14th National People's Congress voted to pass the resolution of the Standing Committee of the National People's Congress on approving the State Council's issuance of additional treasury bond and the central budget adjustment plan for 2023, specifying that the central finance will issue an additional 1 trillion yuan of treasury bond for 2023 in the fourth quarter of this year. What is the purpose of issuing additional treasury bond in 2023? Where will the additional treasury bond be used? How to manage the trillion yuan treasury bond fund? Why it is increased: It is necessary to support post disaster recovery and reconstruction and improve the ability of disaster prevention, mitigation and relief. Since this year, many places in China have suffered from rainstorm, flood, typhoon and other disasters. Some areas have suffered serious disasters and suffered great losses, and local post disaster recovery and reconstruction tasks are heavier. Meanwhile, in recent years, various extreme natural disasters have occurred frequently, posing higher requirements for China's disaster prevention, reduction, and relief capabilities. The Standing Committee of the Political Bureau of the Central Committee of the Communist Party of China held a meeting on August 17th to study and deploy flood prevention, flood relief, and post disaster recovery and reconstruction work. The meeting proposed to "accelerate recovery and reconstruction" and further enhance China's disaster prevention, reduction, and relief capabilities. These key tasks cannot be separated from the guarantee of "real gold and silver". The relevant person in charge of the Ministry of Finance stated that although the budget at the beginning of the year has already arranged for regular disaster relief and disaster prevention and reduction funds, it is difficult to meet the needs of improving disaster prevention and reduction capabilities. In the view of Liu Yi, the director of the Department of Finance at the School of Economics at Peking University, there is little room for local governments to significantly increase funding arrangements in related fields through their own financial resources, combined with factors such as resolving local government debt risks and ensuring "three guarantees" expenditures. "The issuance of additional treasury bond in 2023 is a major decision and deployment made by the Party Central Committee and the State Council, and an important measure to implement the people centered development idea." The relevant person in charge of the Ministry of Finance said that the implementation of relevant work should be guaranteed with strong funds, and efforts should be concentrated to support post disaster recovery and reconstruction, remedy the shortcomings of disaster prevention, mitigation and relief, and improve China's ability to withstand natural disasters as a whole. "Internationally, many countries will also make some budget adjustments in the middle of the year according to the actual situation of economic and social development." Shi Yinghua, a researcher at the Chinese Academy of Financial Sciences, said that according to the disaster situation in China this year, the central government's issuance of additional treasury bond and budget adjustment is a pragmatic move, reflecting the direction of fiscal reinforcement to ensure key expenditures. How to use it: The additional treasury bond will be issued in the fourth quarter, all of which will be allocated to local governments. It is understood that in combination with the needs of post disaster recovery and reconstruction, disaster prevention, reduction and relief, and overall planning of financial affordability, the central government will issue an additional 1 trillion yuan of treasury bond in 2023 in the fourth quarter, and all of which will be allocated to local governments through transfer payments. Among them, it is planned to use 500 billion yuan this year and carry forward to use 500 billion yuan next year. "The central government has issued additional treasury bond, but all the specific funds are used locally, which helps relieve the pressure on local fiscal revenue and expenditure, further optimizes the structure of fiscal expenditure, and further optimizes the debt structure," said Shi Yinghua. In terms of fund utilization, according to the Ministry of Finance, the focus will be on eight major areas: post disaster recovery and reconstruction, key flood control and governance projects, natural disaster emergency capacity improvement projects, other key flood control projects, irrigation area construction and renovation, key soil erosion control projects, urban drainage and waterlogging prevention and control capacity improvement actions, and comprehensive prevention and control of key natural disasters
Edit：Hou Wenzhe Responsible editor：WeiZe
Source：XinhuaNet
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