1. Local governments revenues of China
K-9546 Yuan Jiajie
K-9548 Zhao Han

2. Structure : Introduction of administrative divisions of China
Establishing the Tax Sharing System
The structure of local governments revenues of China
central-local relations of revenues
Grants in provincial revenues
Revenue size of State-owned enterprises
Two examples about Shanghai’ s and Guizhou’s revenues

3. Introduction of administrative divisions of China
The People's Republic of China administers 33 provincial-level divisions or first-level divisions including 22 provinces, five autonomous regions, four municipalities, and two special administrative regions: Hong kong and Macau.

5. Completed structure of central and local governments in China

6. Establishing the Tax Sharing System
Background: In 1994, a new tax system, called the tax sharing system, was established. Several significant changes in the tax system: ①reduction of the number of taxes from 37 to 23 ②unification of the income tax rate for all enterprises to 33% ③division of taxes into three categories，namely, national taxes，joint taxes and local taxes ④the establishment of a central tax bureau ,a local tax bureau and a central to local tax rebate system

7. The results of Establishing the Tax Sharing System
The 1994 tax reforms did not raise government tax revenue immediately.
In fact, the real total tax revenue actually declined from 1993 to 1994.
The decrease in total tax revenue was a result of the reduction of the number of taxes (from 37 to 23) and the reduction of the corporate income tax rate for large and medium size enterprises from 55% to 33%.
However, the 1994 tax reforms laid the foundation for the government tax revenue growth in the coming years.

8. Local/Provincial Budget Revenue Structure in China (2015) (in 10,000s Yuan) figure 1
Light red: local governments’ budget revenues light blue: taxes revenues
Purple : added value taxes green: business taxes
Blue: enterprise income taxes pink: personal income taxes

10. central-local relations of revenues
Light red: central government revenues blue: taxes revenue
Purple: added value taxes green: excise revenue

11. Grants(transfers) in provincial budgets
The background about grant system in China:
① Since 1980,the relative share of special purpose grants has increased.
② In 1992,the amount of special purpose grants was five times as great as in 1980.
③Special purpose grants have been incorporated in the budgets of central and provincial governments for 1994.

12. Some characteristics of grants in provincial budgets:
Under existing laws, local governments cannot have budgetary deficits.
Local own revenue and grants received must equal local government expenditure.
If a local government cannot get sufficient grants to cover the deficit, it must adopt legislation on extraordinary measures to increase own revenues or reduce expenditures.

13. The main problem of existing system grants:
Lack of transparency:
Both in regard to the objectives of grants and the basic of their calculation.
In turn, these weakness appear to translate into some lack of control over the growth of some grants.

14. The revenue size

15. (1)The revenue size of SOEs

16. SOEs of China
The state‐owned and controlled portion of the Chinese economy is large.  Based on
reasonable assumptions, it appears that the visible state sector—SOEs and entities
directly controlled by SOEs, accounted for more than 40 percent of China’s non‐
agricultural GDP.   If the contributions of indirectly controlled entities, urban collectives,
and public TVEs are considered, the share of GDP owned and controlled by the state is
approximately 50 percent.

17. The next figure contains data on revenues of major SOEs involved in the coal industry.  These data
account for only 13 percent of industry gross output in 2010.  However, based on NBS data, the total SOE and SHE share of output is nearly 60 percent.

18. Table V‐4 below indicates that eight SOEs account for approximately 70 percent of revenue in
the power sector.  The NBS data on the power sector confirms the state’s very prominent role. 
Data on GIOV suggest that state‐owned and controlled firms account for more than 90 percent
of output in 2010.

20. Based on the data in Table V‐6, the shipping industry is also largely controlled by the state. 
Revenue data for individual enterprises and industry‐wide data from the firm Datamonitor
suggest that the top three SOEs accounted for 61 percent of revenue in the sector. 

21. (2)Comparision of revenue size between a rich province and a poor province

22. The government of Shanghai is "the most wealthy" city government in China, according to a recent ranking of revenues.
Government revenues come mainly from taxation, and are primarily used for safeguarding and improving people's livelihood, maintaining the normal operation of government functions and ensuring public safety.

23. In 2014, revenue of government for Shanghai was 45
In 2014, revenue of government for Shanghai was 45.9 million 10,000 yuan. Revenue of government of Shanghai increased from 14.2 million 10,000 yuan in 2005 to 45.9 million 10,000 yuan in 2014 growing at an average annual rate of %.

24. Value added tax:In 2014, revenue from value added tax for Shanghai was 9.69 million 10,000 yuan. Revenue from value added tax of Shanghai increased from 2.26 million 10,000 yuan in 2005 to 9.69 million 10,000 yuan in 2014 growing at an average annual rate of %.

25. In 2014, revenue from business tax for Shanghai was 10 million 10,000 yuan. Revenue from business tax of Shanghai increased from 5.13 million 10,000 yuan in 2005 to 10 million 10,000 yuan in 2014 growing at an average annual rate of 8.21 %.

26. Guizhou is a relatively poor and economically undeveloped province, but rich in natural, cultural and environmental resources. Its nominal GDP for 2012 was billion yuan ( billion USD). Its per capita GDP of RMB 19,566 (3,100 USD) is the lowest in China.
Its natural industry includes timber and forestry. Guizhou is also the third largest producer of tobacco in China, and home to the well-known brand Guizhou Tobacco. Other important industries in the province include energy - a large portion of which is exported to Guangdong and other provinces - and mining, especially in coal。 Guizhou's total output of coal was 118 million tons in 2008, a 7% growth from the previous year. Guizhou's export of power to Guangdong equaled 12% of Guangdong's total power consumption. Over the next 5 years Guizhou hopes to increase this by as much as 50%.

28. Thanks for your attention!