China News Service, Beijing, March 8 (Reporter Zhao Jianhua) The People's Bank of China announced on the 8th that it will hand over the balance of profits to the central government in accordance with the law this year, with a total amount of more than 1 trillion yuan.
The relevant person in charge of China's Ministry of Finance (hereinafter referred to as the person in charge) said that these funding arrangements will be used to significantly increase transfer payments to local governments and help local finance, especially county and district finance, ease the pressure of revenue reduction.
The above-mentioned transfer payment funds will be included in the management of the direct mechanism, which will quickly and accurately reach the grassroots level in cities and counties, and directly benefit enterprises and people.
The person in charge introduced that it is a common practice in China to arrange for specific state-owned financial institutions and specialized institutions to turn over profits, and it is also an important means of coordinating financial resources and adjusting funds across the year, including China National Tobacco Corporation, China Investment Corporation, etc. The People's Bank of China also turns over profits one of the units.
The person in charge stated that, according to Article 39 of the Law of the People's Republic of China on the People's Bank of China, "the income of the People's Bank of China in each fiscal year is deducted from the annual expenditure, and the net amount after the total reserves are drawn in accordance with the proportion approved by the financial department of the State Council. All profits shall be handed over to the central finance”, and the profits handed over by the People’s Bank of China complies with the provisions of Chinese law.
It is also a common practice in the world's major economies to turn over the profits of the central bank to the finance. The Federal Reserve Act, the Bank of Japan Act, and the Bank of England Act all have similar provisions.
The person in charge pointed out that since the outbreak of the epidemic in the 20th century, in order to cope with possible risks and challenges, China has always reserved policy space for fiscal policy measures.
One of the measures reserved for policy space is to suspend the surrender of profits to certain state-owned financial institutions and specialized institutions to meet emergency needs.
Therefore, the relevant institutions have formed some surplus profits to be turned over, and these surplus profits should be turned over.
Considering the current and long-term future, with the implementation of the new combined tax and fee support policy this year, upon approval in accordance with the procedures, certain state-owned financial institutions and specialized institutions will be arranged to hand over part of the balance of profits formed before 2021 this year.
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