Jeremy Wallace

Notes from Zouping…. Another 3 hour marathon in the afternoon at the national tax office. I’m exhausted but am glad that I typed these up while they were fresh in my mind rather than resting on my extremely hard Chinese “bed.” Hopefully I won’t fall asleep in the guoshuiju interview.

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Where? Government Finance Bureau, Zouping County
Who? Officials from the government finance bureau and the government investment office
When? 2005.06.29; 9:00am to 11:15am

Professor Oi’s comments to place this interview in the set of all interviews:
1. The interview was instructive in terms of giving us information regarding the accent problem. Shandong province is known for having particularly difficult pronunciation; it showed here.
2. The offices have changed names and functions recently, so this was the wrong office for some of the preparations that we had made.
3. Sometimes officials will not let us know anything; there are many techniques to this incredibly important bureaucratic skill �C mumble, say it is another agency’s responsibility, say that your underling knows but you don’t and he’s constantly leaving to take calls with his cell phone, etc.

In general, it was difficult to take much away from the meeting given that the subject matter was different than we expected, has been and is still in flux (including the terminology which is used to describe the various phenomena), and was conducted in highly accented Mandarin. To be fair, the tea was very nice and constantly being refilled.

Topics Covered:
The industrial/commercial makeup of the county
The rules for taking over a company
The income of the county
The fiscal contracts with the various townships under the county
The implementation of the feigaishui and the abolition of the agricultural tax
The changing nomenclature and rules of non-budgetary monies

Specifics:
There are now only 2 people under the government investment office, which used to have 4. On the other hand, the government finance office now has at least 58 workers with 12 added last year.

The 34 companies which the county administered previously break down as follows: 16 are grain company businesses (xʳ��ҵ), which are being restructured at the city level (n.b. cities are the new prefectures; Zouping county is a member of Binzhou City, then Shandong Province, then PRC) by the tigaiwei (���ί); 12 are remaining state-owned and are monopolies (but what goods or services these monopolies provide is not clear); 4 have been restructured as corporations; 1 was merged into another firm; and 1 went bankrupt. [I did not ask as many questions about the grain companies as I would have liked to; see the problems above.]

There was a discussion about which townships remain in which fiscal categories. There are currently 13 towns (I know what you are thinking, there used to be 14. You are correct. Zouping Town has dissolved and was broken up into 3 town level units that are not actually towns, hence 13.). The categories remain �C subsidy towns; no taxes, no subsidy towns; and tax towns �C and there have been some changes about which towns fall into which categories. The budget constraints remain at least somewhat soft (if a town cannot meet its fiscal targets, the county will help), but there are incentives to foster growth in a town’s economy since the leadership will retain excess revenues until a new fiscal contract is signed (a process which happens every three years).

At the same point in time, after the feigaishui (tax-for-fee) reform was implemented, “all of the towns were in debt.” So the balance sheets for the towns remain unclear.

Suprisingly, Zouping has abolished its agricultural tax (ũҵˮ) ahead of provincial level mandates and was the first in Binzhou city to do so. It remains unclear to us how this was funded and what affect on finances this change had. 3800 wan yuan (wan = 10,000; Chinese use a system based on 4 digits and then a comma rather than the English use of 3) was collected from the agricultural tax in 2002. By 2004 this was cut in half, and subsidies were paid to the villagers of 13 yuan / mu (a mu is unit of area equal to 1/15 of a hectacre, if that helps). However, it is unclear whether or not this 13 yuan / mu subsidy is in addition to the agricultural tax relief or is a description of the tax relief itself.

In 2004, the county received over 4 thousand wan yuan of specialized transfers (ת��֧��) and added its own money to 5 thousand wan to send to (all? poor?) townships. This year, the numbers are 4 thousand and 6 thousand. Yet the county is currently decreasing the amount which it subsidizes the townships to try to push them to develop.

They asked Prof. Oi what she thought of the American pressure to revalue the yuan. She thinks that the Chinese should be able to decide when revaluation should come.