Govt policy moves in the past week

Fiscal power of central, local govts clarified

A particular reform will be carried out from Jan 1, 2019 to divide fiscal power and expenditure between central and local governments for basic public services, according to a recent State Council notice. The reform, aimed to establish a basic public service system, will focus on clarified rights and responsibilities. The document said 18 items under eight categories are included in shared fiscal responsibilities between central and local governments, including compulsory education, basic employment services and healthcare insurance. The central government will release a national standard to deliver basic public services, which should both ensure basic needs and development in line with local economic conditions and the government’s financial status.

As development differs across the country, the division of expenditure responsibilities between central and local governments for each public service will vary. The central government will take a larger ratio of public service expenditures in western parts of the country than its more-developed eastern parts, in areas such as subsidies for compulsory education. Shared fiscal obligations vary in seven items for different regions, including State stipends for secondary occupational education, subsidies for urban and rural residents’ basic healthcare insurance, and public health services.

It depends on local government’s financial capacity and the number of people in need when it comes to the proportion of central government payment to cover basic employment services, medical aid and help for people facing difficulties.

Inspection on official websites brings results

The State Council released a notice recently on the outcome of a nationwide inspection of government websites conducted during the fourth quarter last year. As of Dec 1, a total of 24,820 government websites were in operation, including 1,961 run by departments under the State Council and 32 portal websites run by provincial-level governments.

The General Office of the State Council conducted a random inspection of 460 websites and found that 95 percent met standards. Official websites of local governments of Beijing, Tianjin, Hainan province, and the Xinjiang Production and Construction Corps were 100 percent qualified in four consecutive quarters.

All provincial regions and 71 State Council departments randomly checked 12,336 websites under their administration, which accounted for 50 percent of government websites and scored an average qualification rate of 96 percent. In total, 14,208 valid messages were received to report errors on government websites in the fourth quarter, and 99 percent of them were responded to. For 25 websites selected from the Inner Mongolia autonomous region, Shanghai, Hunan province, the Ministry of Public Security and the Ministry of Environmental Protection, the ratio hit 100 percent. During this period, 116 officials were punished or received warnings for unqualified website operations.

In 2017, all regions and departments had inspected 43,139 government websites at all levels. In the same year, 21,513 websites in poor maintenance were integrated or removed, including 18,318 sites for governments under the county level. The inspection also found 625 officials to be accountable for poor-quality websites.

Some problems arose in the inspection, such as casual domain names and logos, shortage of rectification measures, meager interaction with netizens and inadequate security control.

Based on the outcomes, the notice said more efforts should be made to supervise government websites and provide better online governmental services. Governments at all levels should improve normal website supervision, carry out corrections, better interact with netizens to address their concerns, and advance security mechanisms to make sure government websites are safe and secure.

Enterprises to be deleveraged

Efforts will be made to continue deleveraging enterprises by promoting market-based debt-to-equity swaps to guard against debt risks, according to a State Council executive meeting, presided over by Premier Li Keqiang on Feb 7.

State-owned enterprises will be key in the deleveraging campaign, which will be carried out through measures such as SOE reform, cutting overcapacity and reducing costs, said a statement released after the meeting.

Corporate management should be improved for these enterprises as the mixed ownership reform is deepened.

Policies on corporate mergers should be improved and a reasonable mechanism should be established for the government, enterprises and banks to share losses when “zombie enterprises” go bankrupt.

Channels for equity investment from the private sector should be expanded, supporting equity investment institutions to participate in market-based debt-to-equity swaps.

Targeted guidance will be released to regulate the debt-to-equity swaps to reduce the debt ratio for enterprises, the statement added.