Glamor Economics

Chapter 96

Chapter 13, Section 6 Why is he unwilling to take off the hat of "poor county"—Financial subsidies

On February 2009, 2, the Ministry of Finance announced the "Interim Measures for the Management of Financial Subsidy Funds for the Demonstration and Promotion of Energy-Saving and New Energy Vehicles" issued by the Ministry and the Ministry of Science and Technology.

The method decides to carry out demonstration and promotion pilot work of energy-saving and new energy vehicles in 13 cities including Beijing, Shanghai, Chongqing, Changchun, Dalian, Hangzhou, Jinan, Wuhan, Shenzhen, Hefei, Changsha, Kunming, and Nanchang, and to encourage public transportation with financial policies. Public service fields such as rental, public affairs, sanitation, and postal services take the lead in promoting the use of energy-saving and new-energy vehicles, and subsidies are given to units that promote the use of energy-saving and new-energy vehicles.

Among them, the central finance will focus on subsidizing the purchase of energy-saving and new energy vehicles, and the local finance will focus on providing subsidies for the construction and maintenance of related supporting facilities.

In order to ensure the smooth progress of the pilot work, the financial departments of the pilot provinces (cities) should promptly formulate an implementation plan for the demonstration and promotion of energy-saving and new energy vehicles and submit it to the Ministry of Finance and the Ministry of Science and Technology.At the same time, the pilot cities should track the demonstration operation of energy-saving and new energy vehicles, and regularly report the actual energy-saving effects, the arrangement and use of financial subsidy funds, and the problems found in the pilot work to the Ministry of Finance and the Ministry of Science and Technology.

The method also stipulates that the demonstration and promotion of energy-saving and new energy vehicles must meet the fuel saving rate of hybrid passenger cars and light commercial vehicles compared with similar traditional models, and the fuel saving rate of hybrid electric buses must reach more than 5%. ; Manufacturers must provide a warranty period of not less than 10 years or 3 kilometers (whichever comes first) for key components such as power batteries.

In 2009, in order to stimulate economic growth and increase consumption, the state implemented financial subsidy policies for automobiles, color TVs, motorcycles and other products.Financial subsidies are a kind of transfer expenditure.From the perspective of the government, the payment is free; from the perspective of recipients, it means that the real income has increased and the economic situation has improved compared to before.Because of this characteristic of financial subsidies, for example, "national-level poor counties" can be allocated some financial subsidies every year. Even if they are no longer "poor", they still refuse to take off the label of "poor counties".

Financial subsidies are always associated with changes in relative prices, and they have the effect of changing the resource allocation structure, supply structure, and demand structure.We can define fiscal subsidy as a kind of government free expenditure that affects the relative price structure, thereby changing the resource allocation structure, supply structure and demand structure.

Financial subsidies refer to the form of national income redistribution in which state financial funds are used to directly subsidize enterprises or residents.In order to achieve specific political and economic goals, the country provides financial assistance to state-owned enterprises or individual laborers through special funds for financial arrangements.China's current financial subsidies mainly include price subsidies and enterprise loss subsidies.The objects of the subsidy are state-owned enterprises and residents.The scope of the subsidy involves all sectors of the national economy such as industry, agriculture, commerce, transportation, construction, and foreign trade, as well as all links of production, circulation, and consumption, as well as all aspects of residents' lives.

From the division of subsidy subjects, financial subsidies are divided into central financial subsidies and local financial subsidies.Central financial subsidies are included in the central financial budget.The central finance is responsible for subsidizing the losses of state-owned enterprises under the central government due to policy reasons, and at the same time subsidizing the sales price of some major agricultural and sideline products and industrial products lower than the purchase price or cost price.Local financial subsidies are included in the local financial budget.Local finance is responsible for subsidizing the losses of local state-owned enterprises due to policy reasons, and also subsidizing the sales price of some agricultural and sideline products lower than the purchase price.

Financial subsidy is a financial measure adopted under certain conditions in order to develop the socialist economy and ensure the welfare of laborers.It has a dual role: on the one hand, financial subsidies are an important lever for the state to regulate the national economy and social life.The use of financial subsidies, especially price subsidies, can maintain the basic stability of market sales prices and ensure the basic living standards of urban and rural residents, which is conducive to the rational distribution of national income and the rational use and development of resources.On the other hand, if the scope of subsidies is too wide and too many items will distort the price comparison relationship, weaken the role of price as an economic lever, hinder the correct calculation of costs and benefits, cover up the operating losses of enterprises, and will not be conducive to promoting enterprises to improve their management; if subsidies If the amount is too large and exceeds the state's financial capacity, it will become a heavy burden on the state's finances, affect the scale of economic construction, and hinder the speed of economic development.

[links to related words]

Price subsidy refers to the measure that the state or social group pays subsidies to producers, operators or consumers of certain commodities free of charge to maintain a certain price level.Its essence is to compensate for the loss of economic interests of these producers, operators or consumers.Generally used in agriculture, foreign trade and transportation.

Enterprise loss subsidies Under the market economy, enterprises are in a position of equal competition. Through market mechanisms, the survival of the fittest is achieved, and the government does not intervene in enterprise operations in principle.However, in the initial stage of my country's market economy, the state has to control the price or business scope of some special fields or industries related to the national economy and people's livelihood, resulting in insufficient sales revenue of enterprises to make up for the production costs, original purchase prices and related taxes apportioned according to regulations. , thus forming a loss, so the state finance also needs to give certain policy subsidies.Subsidies in this area include: loss subsidies for grain enterprises, loss subsidies for coal enterprises, loss subsidies for non-ferrous metal enterprises, and loss subsidies for agricultural reclamation enterprises.

(End of this chapter)