Xiangxi Tujia and Miao Autonomous Prefecture Overview — Finance and Banking (I)
Chapter 7: Finance and Banking. Finance and banking in Xiangxi adhered to the principle of serving industrial and agricultural production and the lives of all ethnic groups. While making important contributions to the prosperity of Xiangxi's ethnic economy and culture, they also continuously developed and strengthened themselves. Section 1: Finance. Finance in Xiangxi went through a difficult...
This article has been compiled from historical materials in the "Zhangjiajie Tour Guide Network" (33519.com · City Overview section). Some administrative divisions, population, socioeconomic data, and policy information may be outdated and are for reference only; for the latest situation, please refer to official releases by the local government and scenic areas.
Chapter VII Finance and Banking
The finance and banking work of Xiangxi Autonomous Prefecture persisted in the guideline of serving industrial and agricultural production and serving the lives of people of all ethnic groups. While making important contributions to the prosperity of the ethnic economy and culture of Xiangxi Autonomous Prefecture, it also continuously developed and strengthened itself.
Section 1 Finance
The financial undertaking of Xiangxi Autonomous Prefecture went through a difficult, tortuous, and glorious course of development. Historically, the economy of the Xiangxi ethnic region was always a single agricultural economic model, with backward production methods and a relatively low level of development. In addition, exorbitant taxes and levies were severe, and landlords, bandits, and government officials exploited and plundered layer by layer, leaving the broad peasant masses short of clothing and food and suffering from cold and hunger. The beautiful and richly endowed Xiangxi was reduced to poverty and exhaustion, a scene of desolation. According to records, in the 23rd year of the Republic of China (1934), there were as many as 93 kinds of taxes and levies under various names in the Xiangxi region.
When New China was founded in 1949, the higher-level Party committees and governments immediately allocated special funds and transferred grain to help the people of all ethnic groups in the Xiangxi region develop production and solve livelihood difficulties. People of all ethnic groups also enthusiastically sold public grain and purchased victory public bonds, supporting the people's government with practical actions, thereby healing the wounds of war and achieving an improvement in the fiscal and economic situation. In the early 1950s, the 10 counties within the prefecture belonged respectively to the Yongshun and Yuanling administrative offices, and finance was uniformly collected and spent by the province, with no local first-level finance. The main source of fiscal revenue was the agricultural tax, which accounted for more than half of total fiscal revenue. Fiscal expenditure mainly supported suppressing bandits, reducing rent, land reform, establishing a people's democratic regime, comprehensively restoring agricultural production and commercial transportation, building the Yongshun-Dayong highway, and establishing and developing education, culture, health, and other undertakings. In the total fiscal expenditure in 1951, administrative expenditure accounted for 41.5%, and science, education, culture, and health expenditure accounted for 45.8%, while 70,000 yuan was squeezed out to solve livelihood difficulties of the masses. In 1954, a local first-level financial organ was established. The central government and Hunan Province implemented some special preferential treatments for the finances of the Xiangxi Miao Autonomous Prefecture, such as allocating reserve funds higher than those for ordinary regions, increasing subsidies for ethnic minority areas, ethnic minority flexible funds, capital construction investment in areas inhabited by ethnic minorities, funds to support backward areas and the construction of old revolutionary base areas, and ethnic reduction and exemption preferences in agricultural tax, and so on. The financial departments fully gave play to the financial function and actively supported local economic development. During the First Five-Year Plan period (1953-1957), funds were successively raised to build a number of small industrial enterprises, mainly the Shaba Sulfur Mine, Limixi Iron Works, Jishou Power Plant, Jishou General Machinery Plant, Jishou Distillery, and others, developing local industry and increasing fiscal revenue. With the increase in fiscal revenue, the intensity of fiscal support for economic and social development also continuously increased. During the "First Five-Year Plan" period, the prefecture's total fiscal revenue was 38.17 million yuan, of which expenditures for capital construction, industrial and agricultural production, and cultural, educational, and health undertakings totaled 29.22 million yuan, accounting for 76.55% of total fiscal revenue, laying a relatively good foundation for further developing the national economy.
In 1958, the prefecture's finance raised funds to build the Yongshun Yarn Factory and the Baojing and Luxi Vegetable Oil Plants, and began construction on some highway and water conservancy projects, making a very good start. However, the "Great Steelmaking" and "Great Leap Forward" that began in the second half of 1958 led to false reporting and exaggeration, and serious false fiscal revenue, bringing some difficulties to the fiscal economy. In the winter of 1960, the state implemented the guideline of "adjustment, consolidation, filling out, and raising standards," and industrial and agricultural production in Xiangxi Autonomous Prefecture entered a new stage of development, while fiscal and economic work also developed relatively smoothly. In 1965, the prefecture's fiscal revenue rose to 19.68 million yuan, an increase of 60% over 1957. Expenditure on cultural, educational, and health undertakings alone was 7.51 million yuan, the largest investment since the founding of New China. At the same time, the financial departments of Xiangxi Autonomous Prefecture earnestly implemented the Party and state policies on ethnic affairs, rationally used various ethnic subsidy funds, and implemented the agricultural tax reduction and exemption policies and preferential policies for ethnic trade in various periods, promoting the social and economic development of ethnic regions. During the ten-year "Cultural Revolution" period, the financial work of Xiangxi Autonomous Prefecture still operated as usual.
After the Third Plenary Session of the Eleventh Central Committee of the Communist Party of China, Xiangxi Autonomous Prefecture earnestly shifted the focus of its work, implemented the Party and state policy of "adjustment, reform, consolidation and improvement" for economic work, and gradually set various economic construction efforts on a track of healthy development. Along with the acceleration of reform and opening up, starting in 1978, Xiangxi Autonomous Prefecture carried out a series of supporting fiscal reforms modeled on the provincial fiscal system for the prefecture, such as implementing a fiscal system of graded contracting between the prefecture and counties, comprehensively establishing township-level finance, and subsequently making multiple adjustments, which effectively mobilized the enthusiasm of grassroots governments and fiscal departments for financial management; implementing the replacement of profit delivery with tax payment, the replacement of fiscal allocations with loans, and the replacement of fixed-price supply with negotiated pricing, replenishing enterprises' own funds, raising the level of retained profits, and strengthening enterprises' capacity for independent operation; implementing for administrative and institutional units "budget contracting, retention of savings, and keeping of increased revenue," prompting units to spend less, do more, do good work, and increase revenue while cutting expenditure; changing some fiscal expenditures from gratis to compensated, establishing various revolving funds, and setting up trust and investment companies, thereby improving the effectiveness of fiscal fund use; strengthening the management of extra-budgetary funds, unifying receipt vouchers, centralizing fiscal management, and circulating idle funds, which supported the normal development of various undertakings; strengthening the training of accounting personnel, conducting assessments of technical titles, and raising the status, treatment and quality of accounting personnel. These reform measures powerfully promoted the development of the prefecture's fiscal economy. In 1988, the fiscal revenue of the 10 counties and cities in the prefecture reached 232 million yuan, an increase of 357.8% over 1980, with an average annual increase of 24.3%; fiscal expenditure was 357 million yuan, a year-on-year increase of 200.3%, with an average annual increase of 17%. Of fiscal revenue, industrial and commercial taxes accounted for 97.5%, while agricultural tax accounted for only 1.1%. Of fiscal expenditure, economic construction costs accounted for 36.9%, expenses for education, science, culture and health accounted for 31%, and administrative management costs accounted for 16.7%, as the structure of fiscal revenue and expenditure moved toward rationality. During this period, higher authorities gave many preferences and considerations to the finances of Xiangxi Autonomous Prefecture, but too few projects were arranged for capital construction funds and enterprise tapping-potential and transformation funds. Due to the lack of construction funds, although natural resources were abundant, there was no capacity for development. By 1988, the prefecture had not a single key industrial project under central or provincial administration, nor a single large enterprise. During this period, because the fiscal contracting system was implemented, the methods of higher-level fiscal subsidies were also continuously adjusted. In 1988, higher-level fiscal subsidies were 137 million yuan, increasing by only 49.4% over seven years, greatly lower than the growth rate of fiscal revenue. Deficits began to appear in 1986, and in 1988, 7 of the 10 counties and cities in the prefecture had deficits, with total deficits reaching 21.191 million yuan.
After entering the 1990s, as the national market economy system was gradually established, the fiscal work of Xiangxi Autonomous Prefecture developed relatively rapidly. First, the fiscal management system was further improved. In particular, starting in 1994, the "tax-sharing system" fiscal system was comprehensively implemented. According to the principle of unifying administrative authority and fiscal authority, the prefecture and counties redivided tax categories and the scope of revenue and expenditure, and implemented supporting methods such as revenue rebates or subsidies, fixed-amount remittances, and transfer payments. In 1995, a management system of "dividing tax categories and scope, fixing revenue and expenditure, fixed-amount remittance (or subsidy), full retention of excess revenue (or sharing), self-responsibility for shortfalls (or sharing), and fixing for three years (or five years)" was implemented for all townships and towns, greatly mobilizing the enthusiasm of grassroots financial management. In 1997, careful calculations were made of various revenues of prefecture-direct administrative and institutional units. In 1998, the "two reforms" of fee management and comprehensive budgeting finance were promoted, intensifying the overall planning of funds inside and outside the budget and effectively reducing the pressure on fiscal expenditure. In 2000, management measures for the reimbursement system of special fiscal funds and for the payment of wages of fiscally supported personnel were promoted, and a government procurement center was established. Second, the structure of fiscal sources was further optimized. During the "Eighth Five-Year Plan" and "Ninth Five-Year Plan" periods, in response to the deformed and monolithic "tobacco and liquor" fiscal source structure formed under the planned economy system, Xiangxi Autonomous Prefecture persisted in treating the optimization of the fiscal source structure and the strengthening of fiscal strength as a major strategic measure, and successively organized and implemented the "8511" project for township fiscal source construction (by the end of the "Eighth Five-Year Plan," township fiscal revenue in the prefecture was to reach 100 million yuan and civilized finance offices were to reach 100) and the "9522" project (by the end of the "Ninth Five-Year Plan," township fiscal revenue in the prefecture was to reach 220 million yuan), the "9545" project for county and city fiscal sources, and the "9529" project for prefecture-level fiscal sources, enabling the prefecture, county and city, and township levels to form a situation in which the "three great gears" turned together and the "Eighth Five-Year Plan" and "Ninth Five-Year Plan" linked and promoted each other. In particular, during the "Ninth Five-Year Plan" period, in response to the severe reality of the shutdown of the Qianzhou Cigarette Factory in the prefecture, the sell-off of production quotas by the Yongshun and Fenghuang cigarette factories, and the sharp decline of backbone fiscal sources, vigorous efforts were made on a number of key fiscal source projects, such as the "2020" project of Xiangquan Group, the Jinquan color printing production line, and the prefecture foreign trade chemical plant's project with an annual output of 5,000 tons of electrolytic zinc; the development of tobacco leaves, ponkan, tea, kiwifruit, pigs, goats and cattle was promoted to accelerate the process of agricultural industrialization; funds for tourism development were arranged to support the construction of a number of tourist attractions such as Yongshun Mengdong River, Longshan Pidu River, Guzhang Qifeng Lake, Jishou Dehang, and Fenghuang Southern Great Wall, and to develop the tertiary industry; urban infrastructure construction was intensified to promote the prosperity of the private economy, laying a solid foundation for the rapid growth of fiscal revenue. In 1993, 1994 and 1995, fiscal revenue increased by 100 million yuan over the previous year for three consecutive years. By the end of the "Eighth Five-Year Plan," the prefecture's total fiscal revenue was 1.8 times higher than at the end of the "Seventh Five-Year Plan." In 1996, the total fiscal revenue of the prefecture's 8 counties and cities reached 747 million yuan, nearly 33 times the 23 million yuan of 1978. Starting in 1997, due to the impact of structural adjustment of cigarette factories in the prefecture, fiscal revenue declined somewhat, but from 2000 the unfavorable situation was reversed. That year, even though Xiangquan Group was digesting historical burdens and faced great difficulties in capital operations, the prefecture still completed total fiscal revenue of 598 million yuan. While fiscal revenue grew steadily, fiscal expenditure also rose year by year. In 2000 it reached 1.27 billion yuan, 14 times that of the early period of reform and opening up. From 1980 to 2000, the prefecture's cumulative fiscal expenditure for capital construction and enterprise transformation reached 1.6 billion yuan. During the "Eighth Five-Year Plan" period, the prefecture's agricultural input reached 358 million yuan, an increase of 62.9% over the "Seventh Five-Year Plan" period. From 1980 to 2000, the prefecture's cumulative funds for social undertakings such as education, science, culture and health reached 2.9 billion yuan, accounting for nearly 30% of total fiscal expenditure in the same period, powerfully promoting the prefecture's economic construction and the development of social undertakings.
After entering the "Tenth Five-Year Plan" period, the fiscal department of Xiangxi Autonomous Prefecture further strengthened fiscal functions, continuously deepened fiscal reform, and markedly improved the level of financial management according to law, effectively promoting the development of the prefecture's economy and various social undertakings. In making the "cake" of fiscal revenue bigger, the fiscal department firmly seized the historical opportunity of the state's implementation of a proactive fiscal policy and the large-scale development of the western region, and, in accordance with the principle of "supporting the excellent and the strong," did everything possible to raise funds and increase support for advantageous industries, flagship products and major profit and tax payers, so that a diversified pattern of fiscal sources in Xiangxi Autonomous Prefecture was basically formed and the ability of finance to resist risks was markedly enhanced. In fiscal expenditure, it always adhered to the principle of "first ensuring food, second ensuring construction," treated wage expenditure as the first priority of fiscal expenditure, fully and solidly funded it, managed it through special accounts, and actively sought transfer payment and balanced fund scheduling policies, so that by the end of the year the wages of fiscally supported personnel throughout the prefecture were basically paid in place, government organs at all levels could operate normally, and expenditures for social security, agriculture, education, science, health, and public security, procuratorate, courts and judicial administration were effectively guaranteed, promoting the stability and development of the prefecture's economy and society. In fiscal reform, vigorous efforts were made to implement reforms such as departmental budgeting
management, centralized government procurement, centralized treasury payment, and non-tax revenue management. The financial management mechanism was further improved, and the level of fiscal guarantee rose continuously. In 2001, the prefecture's fiscal revenue reached 699 million yuan, an increase of 16.96% over the previous year; fiscal expenditure also increased to a certain extent over the previous year. In 2002, the prefecture's total fiscal revenue reached 774 million yuan, an increase of 10.69% over the previous year; general budget expenditure reached 1.761 billion yuan, an increase of 10.98% over the previous year. In 2003, total fiscal revenue reached 793 million yuan, an increase of 16.86% over the previous year after excluding the factor of the sell-off of production quotas by the Longshan Cigarette Factory; total fiscal expenditure reached 2.104 billion yuan, an increase of 14.63% over the previous year. In 2004, the prefecture's total fiscal revenue reached 791 million yuan, an increase of 16.73% over the previous year after excluding the factor of the sell-off of production quotas by the Longshan Cigarette Factory; total fiscal expenditure was 2.110 billion yuan, an increase of 14.96% over the previous year. In 2005, the prefecture's total fiscal revenue reached 1.205 billion yuan, an increase of 24.72% over the previous year, a new high in nearly 10 years; fiscal expenditure completed was 3.093 billion yuan, an increase of 24.24% over the previous year, basically achieving synchronous growth of fiscal revenue and expenditure. The substantial growth of fiscal revenue and expenditure laid a solid financial foundation for the smooth implementation of Xiangxi Autonomous Prefecture's "Eleventh Five-Year Plan."
While affirming the achievements, we must also clearly see the problems and shortcomings in the fiscal work of Xiangxi Autonomous Prefecture, mainly: the total amount of fiscal revenue is still relatively small, the level of expenditure guarantee is relatively low, and the contradiction between fiscal revenue and expenditure is prominent. In particular, the fiscal and economic conditions of counties and cities have not yet fundamentally improved, the task of alleviating the difficulties of counties and cities remains arduous, the government's debt repayment pressure is relatively great, and relatively large fiscal risks lie hidden.