The Politburo meeting that ended yesterday (December 8) regained the confidence of the tired parties, and the signals released by the meeting also made the learning and Xi understanding of all parties still unfinished.
The meeting pointed out that next year (2024), it is necessary to adhere to the principle of seeking progress while maintaining stability, promoting stability with progress, establishing first and then breaking down, strengthening counter-cyclical and cross-cyclical adjustment of macro policies, and continuing to implement a proactive fiscal policy and a prudent monetary policy. It is necessary to continue to effectively prevent and resolve risks in key areas, and resolutely adhere to the bottom line of no systemic risks.
As we all know, in the prevention and resolution of key risk areas, the prevention of local debt risk has always been the focus of work, especially hidden debt risk. The Politburo meeting proposed that "we must continue to effectively prevent and resolve risks in key areas", which is undoubtedly another warning to the local ** debt risk.
Nafu Finance and Economics found that in 2023, the Politburo level has mentioned "local debt risk" twice. The ** Politburo meetings were held on April 28 and July 24, respectively. The April meeting mentioned that "it is necessary to strengthen the management of local ** debts and strictly control the new hidden debts";The July meeting mentioned that "it is necessary to effectively prevent and resolve local debt risks and formulate and implement a package of debt reduction plans". Previously, in mid-March, the "** Work Report" and the "Report on the Implementation of the ** and Local Budgets in 2022 and the Draft of the 2023 ** and Local Budgets" all involved the prevention of local ** debt risks;In September, a symposium on the establishment of a reporting system for listening to and deliberating on debt management was heldOn October 30, the ** financial work conference proposed to "establish a long-term mechanism for preventing and resolving local debt risks, establish a ** debt management mechanism that is compatible with high-quality development, and optimize the ** and local ** debt structure." ”
It can be seen that the large number of local debts (especially hidden debts), the large hidden risks, and the long debt period are highly valued.
After the implementation of the new Budget Law in 2015, the issuance of local bonds was liberalized, and the replacement of bonds was used to "open the front door and block the deviation door". However, during the debt swap period, in order to meet the financing needs, the urban investment platform continued to borrow, and the local government formed a new round of debts that should be repaid by the first place, that is, the origin of hidden debts. In July 2017, the Politburo meeting officially mentioned "hidden debt" for the first time, proposing that "it is necessary to actively and steadily resolve the accumulated local debt risk, effectively regulate local debt financing, and resolutely curb the increase of hidden debt". In August 2018, Zhongfa No. 27 was issued, formally defining implicit debts and requiring local governments to resolve implicit debts within 5-10 years. Since then, until today, local debt supervision has focused on the resolution of hidden debts, and "curbing the increase and accumulation" has become the keynote.
However, in fact, in the past few years, the new hidden debt, the debt is not real-time, some local state-owned enterprises and institutions "platform", coupled with the uneven distribution of debt, some cities and counties have entered the peak period of debt repayment, weak debt repayment ability, high debt risk, which is reflected in the local ** hidden debt. In order to prevent local debt risks, it is clear that a package of debt plans should be formulated and implemented. In order to avoid increasing debts while increasing debts, it is very important to strengthen cross-departmental joint supervision, especially the supervision of the people's congress.
In recent years, the National People's Congress has also continuously strengthened its supervision over debts. In 2018, the General Office of the Communist Party of China issued the "Guiding Opinions on the Expansion of the Focus of the Budget Review and Supervision of the National People's Congress to the Expenditure Budget and Policy", one of the key points is that the National People's Congress focuses on the highest debt, such as assessing the national debt risk level;Evaluate the reasonableness of the scale of local ** borrowing;Actively and prudently resolve the accumulated local ** debt risks, resolutely curb the increase of hidden debts, and never allow new types of hidden debts.
In 2021, the General Office of the Communist Party of China issued the "Opinions on Strengthening the Review and Supervision of Debts by Local People's Congresses" to promote the improvement of the content of the draft budget accounts and reports on debts, standardize the content and procedures of the people's congresses to review and supervise debts, strengthen the supervision of the people's congresses on debt risk management and control, and strengthen organizational guarantees.
However, in the past rounds of debt, the situation of rapid growth of local debt has not been substantially resolved. In December 2022, former Finance Minister Liu Kun wrote an article pointing out that under the policy of resolving hidden debts in the past five years, the scale of hidden debts has only dropped by nearly one-third. Since the beginning of this year, there have been significant marginal changes in the policy direction, and "implementing the responsibility of localized debt" + "strict fiscal discipline" has become a frequent expression in various documents. At the same time, the most important purpose is to consolidate the responsibilities of subordinates, avoid moral hazard on the issue of debt, prevent local governments from forming the expectation of "supporting local debts", and force local governments to pay attention to fiscal discipline and strengthen structural reforms to alleviate debt risks.