COVID-19 hit Hubei's economy hard, and Hubei's public finances faced the double pressure of weak revenue growth and multiplying expenditures. As post-pandemic economic and social recovery and post-pandemic reconstruction efforts began, the pressure on fiscal spending increased steeply. Relevant Hubei government departments should seize the opportunity to actively seek post-pandemic transfer funds and project support from the central government. I would like to raise a few suggestions:
Hubei is highly dependent on the central government, seeking transfer payments will help it get out of its financial difficulties
Hubei is highly dependent on the central government. In 2019, the local general public budget revenue of Hubei Province was RMB 338.84 billion and general public budget expenditure was RMB 796.77 billion, of which 59% (RMB 471.66 billion) came from transfer payments revenue. There was an increasing trend of general and special transfers from the central government to Hubei Province. Due to the impact of the pandemic, the existing financial resources are far from being able to meet the post-pandemic reconstruction demands. The impact of COVID-19 on Hubei's economic and social development is unprecedented. The State Council of the Central Party attaches great importance to the prevention and control of the pandemic in Hubei, and will pay equal attention to the challenges of post-pandemic reconstruction and development. Proactively seeking a larger transfer from the central government to support post-pandemic construction work is a major way out of financial difficulties.
A scientific assessment of the impact of the pandemic, accurate measurement of the financial gap, and efforts to secure the scale of transfer payments
During the outbreak of COVID-19, the Ministry of Finance has clearly indicated an increase in transfer payments to areas with serious outbreaks and large funding gaps for prevention and control. We believe that the Central Government will continue to support the post-pandemic reconstruction in Hubei. The provincial Department of Finance should take the lead in comprehensively assessing the scale of the impact of the pandemic on Hubei's economic growth as well as fiscal revenue and expenditure, calculate scientifically the scale of new transfer payments required from the central government in the province, and work out a detailed list for reporting. It is important to develop a programme of work for upward mobility and to find ways to take advantage of various transfer payment policies, including tax exemptions. The funds obtained are to be used in strict accordance with the rules. The provincial government should strengthen the supervision of the whole process of the use of the transfer payments obtained, standardise the approval procedures and ensure that the funds are used exclusively for the purpose.
Taking construction projects as a carrier, discussing key projects scientifically and striving to incorporate key projects into the 14th National Five-Year Plan
Construction of projects are important channels for seeking transfer payments from the central government. The preparation of the National 14th Five-Year Plan is well underway. The Hubei government can use the post-pandemic reconstruction as an opportunity to list out the projects that need national support. Seizing the critical moment when the central government is determining the layout of local construction projects, we strive to incorporate post-pandemic construction projects into national planning. Under the unified coordination of the Provincial Development and Reform Commission, all departments will take the right policy direction, actively declare key projects for post-epidemic construction, and work together to connect some important projects that are related to the long-term development of Hubei. For projects that have been clearly supported by the Central Government during the pandemic, we should use the funds in strict accordance with the regulations, ensure progress and quality as required, and gain the trust and further support of the Central Government with remarkable results.