Abstract

China is at a critical juncture in its economic transformation as it tries to rebalance what is generally seen as an exhausted growth model. A unifying theme across the reforms that will deliver this transformation is that it can no longer be achieved by raising the amount of physical investment and government direction of resource allocation. Instead China is building a new set of policy frameworks that will allow markets to function more effectively—not unfettered markets, but markets that work efficiently, in line with broad social and other policy goals, and in a sustainable way. Hence, China is now building a new soft infrastructure, that is, the institutional plumbing that underpins and guides the functioning of markets as the key organizing principle toward achieving sustained economic and social progress. Against this background, this volume provides policymakers, academics, and the public with valuable information about policies and institutions in China today. It also looks at the road ahead and key principles that can help China in navigating it. The book focuses on issues crucial in the country’s transformation, such as tax policy and administration, social security, state-owned enterprise reform, medium-term expenditure frameworks, the role of local government finances, capital account liberalization, and renminbi internationalization. As China moves toward a more price-based allocation of resources, strengthening monetary policy frameworks and financial sector regulation will be particularly important in channeling resources to the most productive sectors and minimizing the risks of financial sector stress. Also, upgrading statistical frameworks will be critical for macroeconomic policymaking and investors. Visit : http://www.elibrary.imf.org/page/modernizing-china

Index

A

  • Administration for Industry and Commerce, tax registration and, 100

  • Administrative assessment, of tax administration, 83

  • Administrative Measures for the General Anti-Avoidance Rules, of SAT, 81n10

  • Administrative reviews, for SAT, 106, 106n44

  • Age dependency, 28t

    • social security and, 17–18, 143

  • Agricultural Bank of China, 281

  • Agriculture

    • taxation of, 78n5

  • Air pollution, 10

    • taxation on, 66–67

  • Alcohol, taxation of, 61

  • Alibaba, 24, 285

  • Alipay, 285–86

  • AMCs. See Asset management companies

  • AML/CFT. See Anti-money laundering and counterterrorism

  • Annual Report on Exchange Arrangements and Exchange Restrictions (AREAER), 21, 216, 216n5, 260, 263

  • Ant Financial, 285

  • Anti-money laundering and counterterrorism (AML/CFT), 271

  • Arbitrage

    • capital flow liberalization and, 228, 242

    • nontraditional lenders and, 292

    • WMPs and, 292

  • AREAER. See Annual Report on Exchange Arrangements and Exchange Restrictions

  • Arrears collection, by SAT, 104–5

  • Asset management companies (AMCs), 282, 291

    • private sector and, 284

  • Association of Southeast Asian Nations, 124

  • Atkinson, A. B., 61

  • Audits

    • for local government finances, 171

    • by SAT, 103–4

    • of VAT, 103, 103n42

  • Augmented debt

    • GDP and, 8, 181

    • IMF and, 118n1

    • local government finances and, 181

B

  • Bad loans, 284

  • Bai, C. E., 194–95, 195n1

  • Balanced-budget rules, 186–87

  • Balance of payments, 27t

    • PBC and, 20, 198

    • SDR and, 275

  • Balance of Payments and International Investment Position Manual (BPM6), by IMF, 343, 343n7

  • Bankers’ acceptances, 295–96

  • Bank for International Settlements (BIS), 254–55

  • Banking system. See Financial sector

  • Bank of China, 281

  • Barnett, S., 70

  • Base erosion and profit shifting (BEPS), 96

  • Basel III, 241

  • Benefit formula, for pensions, 144, 145t, 155, 159

  • Benefit tax principle, recurrent property tax and, 70

  • BEPS. See Base erosion and profit shifting

  • BIS. See Bank for International Settlements

  • Blinder, A. S., 193

  • Bond markets, 300–302

    • corporate, 209, 301

    • inflation and, 209

    • RMB in, 253–54

    • See also Local government bonds

  • Bond yields, 209

    • interest rates and, 20, 197, 199–201, 200t, 201t

    • reserve requirement and, 198

  • Bottom-up baseline expenditure forecasting, in MTEF, 17, 122, 128, 129, 131, 139

  • BPM6. See Balance of Payments and International Investment Position Manual

  • Brazil

    • DGI and, 353f

    • local government finances in, 188

    • SOEs in, 312t

    • tax revenues in, 37f

  • Brazil, Russia, India, China, and South Africa (BRICS), 223, 225f

  • Budget Law

    • local government finances and, 19, 164, 171–75, 291

    • MTEF and, 16

    • revisions to, 181, 182t–185t, 185

    • transparency and, 19

  • Businesses

    • compliance risk management for, 113

    • lump-sum taxes for, 102

    • property tax on, 70

    • See also Corporations; Private sector; State-owned enterprises

  • Business turnover tax, 29, 33, 36

    • VAT from, 33, 60, 60n11

C

  • Canada

    • DGI and, 353f

    • environmental taxes in, 63f

    • M1 in, 193

  • Capital buffers

    • for capital flow liberalization, 234

    • LGFV and, 172

  • Capital flow liberalization, 21–22, 22t, 215–44

    • arbitrage and, 242

    • binding of controls for, 223–29

    • capital buffers for, 234

    • capital inflows and outflows and, 223–24, 227f

    • cases for and against further measures toward, 230–32

    • convertibility and, 216–29, 216n6

    • cross-border portfolio investment and, 220

    • currency-based controls for, 240

    • de facto integration and, 216n6, 224f, 233

    • de jure measures of, 216, 218f

    • depreciation and, 233

    • domestic and international impact of, 238, 239t

    • exchange rates and, 230f, 232–33

    • FDI and, 217, 217n7, 218, 223–24, 226t, 232, 237

    • financial sector and, 233–34

    • foreign exchange markets and, 223, 233

    • future options for, 232–43

    • history of, 217

    • inflow surges with, 240–42

    • liquidity buffers for, 234

    • macroprudential policy and, 234, 241–42, 241n28

    • monetary policy and, 233

    • net errors and omissions with, 228, 229f

    • outflow surges with, 242–43

    • PBC and, 233, 234

    • present situation with, 216–29

    • quotas and, 235

    • removing controls for, 234–40

    • residency-based controls for, 240

    • risks of, 240–43

    • RMB internationalization and, 221–23

    • schemes to ease portfolio investment controls, 218, 221t

    • supporting policies for, 232–34, 236t–237t

  • Capital gains

    • in selected countries, 186f

    • SOEs and, 320t

    • taxation of, 44, 53, 57f, 59

  • Capital income, taxation of, 43, 49–50, 54, 71

  • Capital markets, 285

    • RMB internationalization in, 260, 263

  • Carbon emissions, 10

    • taxation for, 65–66, 65n12, 66n13

    • trading scheme for, 15, 29

  • CBRC. See China Banking Regulatory Commission

  • Central government

    • debt of, 350

    • MTEF and, 135

    • Pensions for Urban Workers and Staff and, 144

    • taxes of, 36–37, 77

    • tax sharing by, 8, 37, 39t–40t, 41f, 165f–167f, 168, 179t

  • Child tax credit, 51

  • China Banking Regulatory Commission (CBRC), 295

    • PBS and, 347

    • on WMPs, 296–97

  • China Construction Bank, 281

  • China Development Bank, 281

  • China Insurance Regulatory Commission, 304

  • China Interbank Bond Market (CIBM), 263, 267, 268

  • China Securities Regulatory Commission (CSRC), 220, 301

  • China Tax Administration Information System (CTAIS), 84–85, 107–8

  • China Utility-Based Energy Efficiency Finance program, 206

  • Chinese Academy of Environmental Planning, 62

  • CIBM. See China Interbank Bond Market

  • City commercial banks, 281

    • lending and deposits of, 286

  • Clements, Benedict, 149n9

  • Climate change, 10

  • Coal industry, 25

    • environmental taxes for, 64f, 67–68

  • Cobb-Douglas production function, 329

  • Communication, improvements in, 12–13

  • Communist Party, 13

    • SOEs and, 25, 318–20, 321

  • Compliance risk management

    • for SAT, 98–99, 98n36, 99n37

    • for small businesses, 113

  • Consumer price index (CPI), 195, 195n1, 338, 339

    • SVAR and, 193, 195, 211–12

  • Consumer-to-consumer transactions, 87n16

  • Consumption

    • rebalancing of, 7

    • tax, 78n6

  • Convertibility, capital flow liberalization and, 216–29, 216n6

  • Coordinated Direct Investment Survey, 343

  • Coordinated Portfolio Investment Survey, 343

  • Corporate bond market, 209, 301

  • Corporate income tax, 56f–57f

    • current situation of, 55–58

    • investment projects and, 55, 55n6

    • proposed reform for, 58–59

    • for SMEs, 57–58, 58t

    • tax rates for, 55–56, 55n5, 58n8

  • Corporate taxation, 33

    • shared by central and local government finances, 37

  • Corporations, multinational, 16, 97

  • CPI. See Consumer price index

  • Credit growth, 8, 9f

  • Credit information system, interest rates and, 206, 209

  • Cross-border portfolio investment, capital flow liberalization and, 220

  • CSRC. See China Securities Regulatory Commission

  • CTAIS. See China Tax Administration Information System

  • Currency-based controls, for capital flow liberalization, 240, 240n24

  • Currency internationalization, 250–52

    • private sector and, 250

    • See also Renminbi internationalization

  • Currency swap agreements, 251

    • PBC and, 270

    • with RMB, 254

    • RMB internationalization and, 270

D

  • Data Gaps Initiative (DGI), of G20, 26, 333, 337, 345, 353f

  • Debt, 118, 118n1

    • of central government, 350

    • in local government finances, 30, 175, 186–89, 187f

    • of SOEs, 314

    • See also Augmented debt

  • Debt-swap program, 172, 208

  • Debt-to-GDP ratio, for local government bonds, 175n6

  • Decision-making phase, for MTEF, 129–31

  • De facto integration, capital flow liberalization and, 216n6, 224f, 225f, 233

  • Default assessments, by SAT, 105

  • De jure measures, of capital flow liberalization, 216, 218f

  • DENG Xiaoping, 3, 217

  • Dependency ratio, 17–18, 28t

  • Deposits

    • of financial sector, 286–88

    • insurance for, RMB internationalization and, 269

    • of JSCBs, 286

    • rates of, interest rates and, 197

    • of rural banks, 286

    • of state-owned banks, 286

  • Depreciation

    • capital flow liberalization and, 233

    • of RMB, 264–65, 265f–266f

  • Development and policy banks, 281

  • Development Research Center, 86n15

  • DGI. See Data Gaps Initiative

  • Digital HR initiative, 107, 109

  • Direct tax reforms, 38–59

    • See also Corporate income tax; individual income tax

  • Dispute resolution, by SAT, 105–6

  • Dividends

    • efficiency, 130

    • taxation of, 44, 50, 52–53, 52n4

  • Dollar, 251n1

    • in IMS, 272

    • RMB and, 268

  • Dollar, D., 329

  • Domestic demand, rebalancing of, 6, 7f

  • DSGE. See Dynamic stochastic general equilibrium

  • Dual income tax system, 15, 49–50, 52, 71

  • Dynamic stochastic general equilibrium (DSGE), 196

    • loan-to-deposit ratio and, 198

    • quantitative loan limits and, 199

    • reserve requirement and, 198

E

  • EBS. See Electronic Broking Services

  • e-commerce, 87, 87n16

  • Economic indicators, 27t

  • Education, 28t

  • Efficiency

    • dividend, 130

    • versus equity, 42

    • of tax system, 42

  • e-GDDS. See Enhanced GDDS

  • Eichengreeen, Barry, 231

  • e-invoicing. See Electronic invoicing

  • Electronic Broking Services (EBS), 255, 274–75

    • foreign exchange markets and, 257

  • Electronic invoicing (e-invoicing), 108

  • Endowments, lump-sum taxes on, 61

  • Energy prices, environmental taxes and, 68

  • Enhanced GDDS (e-GDDS), 336

  • Enterprise Income Tax Law of 2008, 55, 81

  • Entrusted loans, 295

  • Environment

    • social indicators for, 28t

    • tax system and, 10

  • Environmental Protection Law, 66

  • Environmental taxes, 15, 33, 61, 63f–64f

    • current situation for, 62–65

    • energy prices and, 68

    • proposed reforms for, 65–68

  • Equity, versus efficiency, 42

  • Equity markets, 23, 302–4

    • volatility in, 4f

  • Exchange rates

    • capital flow liberalization and, 228–29, 230f, 232–33

    • RMB internationalization and, 269

  • Excise tax, 78n6

  • Expenditure baseline, for MTEF, 128–29

  • Export-Import Bank of China, 281

  • Exports and imports, China’s share of, 335f

  • Exterior sector statistics, 343–44

F

  • FDI. See Foreign direct investment

  • Financial Activities Tax, 62

  • Financial Crisis Response Group, 234

  • Financial frameworks. See Monetary and financial frameworks

  • Financial sector

    • AMCs in, 282, 284, 291

    • bad loans in, 284

    • bankers’ acceptances in, 295–96

    • capital flow liberalization and, 233–34

    • city commercial banks in, 281, 286

    • deposits of, 286–88

    • development and policy banks in, 281

    • entrusted loans in, 295

    • foreign banks, 281

    • fund management companies in, 282

    • fund management subsidiaries in, 282

    • insurance companies, 285, 291, 303

    • interbank funding in, 299–300

    • interest rates and, 201–2

    • intermediating products in, 292–93

    • Internet banking, 285–86

    • investment receivables in, 294–95

    • JSCBs, 281, 286

    • lending by, 286–88

    • nontraditional lenders in, 288–300, 289f

    • rapid change in, 279–305

    • reforms in, 29

    • rural banks in, 281, 286

    • shadow banking, 292, 293t, 297

    • state-owned banks in, 286, 291

    • structure of, 279–86, 280f, 283f

    • VAT and, 62

    • wholesale funding in, 299–300

    • See also Bond markets; Capital markets; Equity markets; Wealth management products

  • Financial sector governance

    • communication and transparency in, 12

    • monetary and financial frameworks for, 23–24

    • rebalancing of, 8–10

    • staffing for, 14

  • Financial Sector Program, of IMF, 14

  • Financial soundness indicators (FSIs), 347–48

  • Fiscal deficit, 8, 10f

  • Fiscal forecasting, MTEF for, 137

  • Fiscal policy frameworks

    • for local government finances, 18–19

    • MTEF for, 16–17, 117–40

    • reforms for, 29–30

    • for social security, 17–18

    • tax administration, 16

    • tax policy, 15–16

    • tax system and, 36

    • trends in, 119f–120f

  • Fiscal policy objectives, for MTEF, 127–28

  • Fiscal risks, local government finances and, 163–78

  • Fiscal rules, for MTEF, 133–34

  • Fiscal space, 125, 125f

  • Fixed asset investment, 28

  • Fixed MTEF, 134

  • Foreign banks, 281

  • Foreign direct investment (FDI), 87, 87n17

    • capital flow liberalization and, 217, 217n7, 218, 223–24, 226t, 232, 237

    • reserve requirements and, 228n15

    • RMB and, 252–53

    • SOEs and, 218, 218n8

    • URR and, 237

  • Foreign exchange markets

    • capital flow liberalization and, 223, 233

    • currency depreciation and, 265

    • EBS and, 257

    • RMB and, 270

    • volatility in, 4f

  • Foreign exchange reserves, 334f

  • France

    • capital flow liberation and, 239

    • DGI and, 353f

    • e-commerce of, 87

    • environmental taxes in, 63f

    • local government finances in, 188–89

    • pensions in, 154n18

  • Freshwater resources, 28

  • Friedman, B. M., 192–93

  • FSIs. See Financial soundness indicators

  • Fund management companies, 282

  • Fund management subsidiaries, 282

G

  • G20. See Group of Twenty

  • Gasoline taxes, 64f

  • GDDS. See General Data Dissemination System

  • GDP

    • augmented debt and, 8, 181

    • bond yields and, 200

    • capital flow liberalization and, 21, 218, 223, 224, 228

    • China’s share of global, 250f, 334f

    • corporate income tax and, 55

    • debt-to-GDP ratio, 175n6

    • environmental taxes and, 62

    • financial sector and, 24

    • local government finances and, 8, 19

    • M2 and, 20, 194–95, 195f

    • macroeconomic statistics and, 26

    • MTEF and, 118, 128, 133

    • national accounts and, 338–39, 339n3

    • pensions and, 18, 152–54, 152n11, 156n23

    • Pensions for Civil Service and Public Unit Workers and, 144, 146, 153

    • Pensions for Urban and Rural Residents and, 144, 146, 153, 153n13, 156

    • Pensions for Urban Workers and Staff and, 144, 153

    • recurrent property tax and, 69

    • revisions policy for, 340–41, 340t, 341f, 342t

    • service sector and, 86n15

    • social security and, 18, 143

    • SOEs and, 24, 309

    • tax administration and, 76, 77t, 78, 79f

    • tax policy and, 15

    • tax system and, 36

  • GDP per capita, 28t

  • General Data Dissemination System (GDDS), 336

  • General Department, of IMF, 275

  • General Funds Budget

    • MTEF and, 124

    • pensions and, 157–58

  • General Resources Account, 275

  • Germany

    • currency internationalization and, 250

    • DGI and, 353f

    • e-commerce of, 87

    • environmental taxes in, 63f

    • insolvency framework for, 12f

    • pensions in, 154n18

  • GFSM. See Government Finance Statistics Manual

  • Gini coefficient, 11f, 28

    • tax system and, 36

  • Global financial crisis, 5

    • domestic demand and, 6

    • local government finances in, 291

    • tax evasion and compliance in, 86n14

  • Global income tax systems, 49–50, 49n3

  • Globalization

    • RMB and, 260f

    • tax administration and, 87–88

    • See also Internationalization

  • Global output, China’s share of, 2f

  • Global trade, China’s share of, 2f

  • Golden Tax Project (GTP), 84–85, 107–8

  • Government borrowing. See Debt

  • Government Finance Statistics Manual (GFSM), 344–45, 344n8

  • Government-Managed Funds Budget, 124

  • Granger causality test, 193

  • Green growth, rebalancing of, 10

  • Greenhouse gas emissions, 68

  • Group of Seven, corporate income tax and, 55

  • Group of Twenty (G20), 11

    • BEPS and, 96

    • Data Gaps Initiative of, 26

    • DGI of, 333, 337, 345, 353f

    • MTEF and, 121

  • Growth targets

    • credit growth and, 8

    • local government finances and, 19

  • GTP. See Golden Tax Project

H

  • High-speed rail system, 3

  • Hong Kong

    • Mutual Recognition of Funds and, 30

    • RMB in, 253, 267, 268

    • Shanghai-Hong Kong Stock Connect, 220, 267

    • Shenzhen-Hong Kong Stock Connect, 30

    • state-owned banks in, 281

  • Hukou (household registration)

    • reforms for, 29

    • tax system and, 36

  • Human resources, for SAT, 83–84, 106–7

I

  • IMF. See International Monetary Fund

  • IMS. See International monetary system

  • Inclusive growth, rebalancing of, 11, 11f

  • Income inequality, 11, 36n1

    • tax system and, 36

  • Income tax, 15–16

    • dual system for, 15, 49–50, 52, 71

    • global systems for, 49–50, 49n3

    • theory of, 42–43

    • See also Corporate income tax; individual income tax

  • Indexation, of pensions, 155

  • India

    • in BRICs, 223, 225f

    • DGI and, 353f

    • local government finances in, 188

    • SOEs in, 312t

    • tax revenues in, 37f

  • Indirect tax reforms

    • policy guidance from, 61

    • to tax policy, 60–70

    • See also Environmental taxes; Recurrent property tax; Value-added tax

  • Individual commodity taxation, 61

  • Individual income tax

    • annual assessment of, 51–52

    • current situation of, 43–49

    • income distribution for, 46f

    • proposed reforms for, 49–54

    • rates of, 43t, 44t, 50–51, 52

    • share of income by source, 47f

    • social security and, 44, 45f, 47f, 54

    • targeted allowances for, 51

    • tax units for, 50

    • tax wedge for, 46f

    • threshold for, 51

    • for urban households, 48f

  • Industrial Commercial Bank of China, 281

  • Inflation

    • bond markets and, 209

    • efficiency dividend and, 130

    • M1 and, 193

    • money supply and, 191

    • MTEF and, 135

    • PBC and, 20

    • SVAR and, 193, 195

    • See also Consumer price index

  • Inflow surges, with capital flow liberalization, 240–42

  • Information technology

    • for SAT, 84–85, 90, 107–8

    • for VAT, 108

  • Innovation, rebalancing of, 7

  • Insolvency framework, 12f

  • Insurance companies, 285, 291, 303

  • Interbank funding, 299–300

  • Interest income, taxation of, 44, 50, 53–54

  • Interest rate corridor, 207–8

    • by PBC, 203–4

  • Interest rates, 8

    • bond yields and, 20, 197, 199–201, 200t, 201t

    • capital flow liberalization and, 228

    • credit information system and, 206, 209

    • deposit rates and, 197

    • financial sector and, 201–2

    • institutional constraints on, 197–206, 198t

    • lending rates and, 197, 202

    • LGFV and, 192, 208–9

    • liberalization of, 20–21

    • loan-to-deposit ratios and, 198–99, 208

    • on local government bonds, 19, 171n3

    • M2 and, 207

    • macroeconomic statistics for, 348–49

    • maturity mismatch and, 205

    • measuring effectiveness of, 199

    • in monetary policy framework, 191–212, 194f

    • in perfect regime, 196–97

    • policy recommendations for, 206

    • quantitative loan limits and, 199, 208

    • reserve requirements and, 198, 208

    • risk preferences mismatch and, 205

    • RMB internationalization and, 269

    • shadow banking and, 199

    • small bank regulatory restrictions and, 205

    • SOEs and, 192, 208–9

    • soft budget constraints and, 100, 202–3

    • specialized guarantee agencies and, 205–6

    • SVAR and, 211–12

    • volatility of, 194f, 196

    • See also Lending rates

  • Intergovernmental relations, with local government finances, 177–78, 185–86, 186f

  • Intermediate targets, for monetary policy, 192–96, 193t

  • Intermediating products, in financial sector, 292–93

  • International balance of payments, 198

  • International Finance Corporation, 206

  • Internationalization

    • of air pollution tax, 66–67

    • of currency, 250–52

    • See also Renminbi internationalization

  • International Monetary Fund (IMF)

    • AREAER of, 21, 216, 216n5, 260, 263

    • augmented debt and, 118n1

    • BPM6 by, 343, 343n7

    • capital flow liberalization and, 21, 215

    • Financial Sector Program of, 14

    • General Department of, 275

    • macroeconomic statistics coordination with, 351–52, 351f

    • nondiscriminatory measures of, 240n25

    • SDDS of, 25, 333, 336

    • Statistics Department of, 348n11

    • tax administration and, 76–77

    • See also Special drawing rights

  • International monetary system (IMS)

    • dollar in, 272

    • RMB internationalization and, 271–73, 272t

  • International Transaction Reporting System, 343

  • Internet

    • banking, 285–86

    • users, 28

  • Investment programming, for MTEF, 137

  • Investment projects, corporate income tax and, 55, 55n6

  • Investment receivables, 294–95

J

  • Japan

    • capital gains in, 186f

    • DGI and, 353f

    • e-commerce of, 87

    • environmental taxes in, 63f

    • MTEF in, 121–22

    • tax revenues in, 37f

  • Joint Ministerial Committee, 234

  • Joint-stock commercial banks (JSCBs), 281

    • lending and deposits of, 286

K

  • Korea

    • capital gains in, 186f

    • DGI and, 353f

    • environmental taxes in, 63f

    • spillovers to, 4f

    • tax revenues in, 37f

L

  • Labor income

    • annual assessment of, 51–52

    • taxation of, 50–52

  • Labor market, 27t

    • indicators for, 342

    • pensions and, 153n15

  • Land use, by SOEs, 316n12

  • Laoren, 147

  • Large Business Department, of SAT, 93, 93n27, 94–95, 95nn30–31

  • Law on the Administration of Tax Collection, 80

  • Legislative Affairs Office, of State Council, 92

  • Lending

    • bad loans, 284

    • entrusted loans, 295

    • by financial sector, 286–88

    • by JSCBs, 286

    • P2P, 285

    • Pledged Supplementary Lending, 301

    • quantitative loan limits, 199, 208

    • quotas for, 20

    • by rural banks, 286

    • by state-owned banks, 286

    • See also Nontraditional lenders

  • Lending rates, 208

    • interest rates and, 197, 202

  • LGFV. See Local government financing vehicles

  • Life expectancy, 3, 28t

    • pensions and, 151, 154, 154n18

    • retirement age and, 154

  • LI Keqiang, 1–3

  • Liquidity buffers, for capital flow liberalization, 234

  • Literacy rate, 3, 28t

  • Loan-to-deposit ratios, 8

    • interest rates and, 198–99, 208

  • Loan-to-value ratio, macroprudential policy and, 241n28

  • Local government bonds, 172n4, 173f–174f

    • debt-to-GDP ratio for, 175n6

    • impediments to, 175

    • interest rate on, 19, 171n3

    • liquidity and credit discipline for, 176

    • pilot program for, 171, 171n2

    • regulation and oversight of, 176, 177t

    • resolution framework for, 176

  • Local government finances, 38n2, 169f–170f

    • audits for, 171

    • augmented debt and, 181

    • in Brazil, 188

    • Budget Law and, 19, 164, 171–75, 291

    • debt in, 30, 175, 186–89, 187f

    • distribution of fiscal revenues in, 189t

    • fiscal policy frameworks for, 18–19

    • in France, 188–89

    • in global financial crisis, 291

    • in India, 188

    • intergovernmental relations with, 177–78, 185–86, 186f

    • international experience with, 185–89, 186f

    • MTEF and, 16, 19, 120–21

    • nontraditional lenders for, 290–91

    • off-budget expenditures and, 178

    • private sector and, 10

    • rebalancing of, 8, 10f

    • recent measures to strengthen, 171–75

    • recurrent property tax for, 33, 69–70

    • shared taxes with central government, 37, 39t–40t, 41f

    • strengthening sustainability of, 175–78, 177t

    • structural features of, 164–71

    • tax administration of, 77, 77n3

    • tax and nontax revenue in, 165f–166f

    • tax sharing and, 8, 37, 39t–40t, 41f, 165f–167f, 168, 179t

    • tax system and, 37–38

    • transparency in, 187

    • WMPs for, 291

  • Local government financing vehicles (LGFV), 168, 170f, 291

    • bond market and, 300–301

    • capital buffers and, 172

    • interest rates and, 192, 208–9

    • PPPs and, 171

    • risk weight for, 172

    • soft budget constraints and, 100, 202–3, 203n4

  • Local Tax Services, 78, 82

  • Lump-sum taxes

    • on endowments, 61

    • for small businesses, 102

M

  • M1. See Monetary target 1

  • M2. See Monetary target 2

  • Macroeconomic statistics

    • challenges for, 348–49

    • IMF coordination with, 351–52, 351f

    • for national accounts, 338–39

    • for policymaking, 25–26

    • price statistics, 339, 342

    • recent developments in, 335–48

    • upgrading, 333–51

  • Macro forecasting, MTEF for, 131–32, 136–37

  • Macro-Prudential Assessment Framework, of PBC, 208

  • Macroprudential policy

    • capital flow liberalization and, 234, 241–42, 241n28

    • loan-to-value ratio and, 241n28

    • reserve requirements and, 241n28

  • MAP. See Mutual agreement procedure

  • Market allocation, of resources, 11–12

  • Master-files, for SAT, 96, 96n34

  • Material Product System (MPS), 335–36, 336n2

  • Maturity mismatch, interest rates and, 205

  • Medical insurance, taxation for, 49

  • Medium-Term and Standing Lending Facilities, 301

  • Medium-term budget framework (MTBF), 126–27, 127f

    • fixed and rolling, 134

    • real and nominal, 135–36

  • Medium-term expenditure framework (MTEF), 122n2

    • background of, 121–23

    • for baseline estimates of expenditure programs, 138

    • bottom-up baseline expenditure forecasting in, 17, 122, 128, 129, 131, 139

    • Budget Law and, 16

    • budget process for, 123–26

    • central government and, 135

    • coverage of, 132–33

    • decision-making phase for, 129–31

    • design choices for, 131–36

    • development responsibility for, 136–38

    • embedding in budget process, 134–35, 135n3

    • expenditure baseline for, 128–29

    • for fiscal forecasting, 137

    • for fiscal policy framework, 117–40

    • fiscal policy objectives for, 127–28

    • fiscal rules for, 133–34

    • globally represented for 2008, 121f

    • how it works, 126–31

    • inflation and, 135

    • investment programming for, 137

    • local government finances and, 19, 120–21

    • for macro forecasting, 131–32, 136–37

    • multiyear fiscal policy with, 137

    • private sector and, 117

    • for reconciliation of resource envelopes, 138

    • sequencing introduction of, 138–39

    • stages of, 131, 132f

    • time horizon for, 17, 122, 124, 126, 134, 140

    • top-down forecasting for, 128

    • types of, 126, 127f

  • Medium-term fiscal framework (MTFF), 126, 127f

  • Medium-term program framework (MTPF), 126, 127, 127f

  • Middle class, 3, 4

  • Migrants, from rural areas, 3

  • Ministry of Finance, 14

    • debt-to-GDP ratio and, 175n6

    • GFSM by, 344–45, 344n8

    • local government bonds and, 171, 175, 175n6

    • MTEF and, 16, 122, 123, 124, 131–32, 133, 136, 137, 138

    • SOEs and, 308

    • TCL and, 92

    • VAT and, 60n11

  • Ministry of Land and Resources, 70

  • Mirrlees, James, 42

  • Monetary and financial frameworks, 19–24

    • capital flow liberalization, 21–22, 22t

    • for financial sector governance, 23–24

    • monetary policy framework, 20–21

    • RMB internationalization, 22–23

  • Monetary and Financial Statistics Manual, by PBC, 345–48, 345n10

  • Monetary gradualism, 193

  • Monetary policy framework, 20–21

    • capital flow liberalization and, 233

    • interest rates in, 191–212, 194f

    • intermediate targets for, 192–96, 193t

  • Monetary target 1 (M1), 193

  • Monetary target 2 (M2), 20–21, 193

    • GDP and, 194–95, 195f

    • interest rate corridors and, 204

    • interest rates and, 207

    • SVAR and, 195

  • Money demand, 196, 196n2, 207, 207n5

  • Money supply

    • inflation and, 191

    • SVAR and, 193

    • in United States, 192–93

    • volatility of, 194f, 195–96

  • MPS. See Material Product System

  • MSCI Emerging Markets Index, 303

  • MTBF. See Medium-term budget framework

  • MTEF. See Medium-term expenditure framework

  • MTFF. See Medium-term fiscal framework

  • MTPF. See Medium-term program framework

  • Multi-lateral Convention on Mutual

    • Administrative Assistance in Tax

    • Matters, 97n35

  • Multinational corporations, 16

    • tax administration for, 97

  • Mutual agreement procedure (MAP), 97

  • Mutual funds, 30

  • Mutual Recognition of Funds, Hong Kong and, 30

N

  • National accounts, macroeconomic statistics for, 338–39

  • National Audit Office, 301

  • National Bureau of Statistics (NBS), 80, 334

    • labor market indicators and, 342

    • MTEF and, 122

    • price statistics and, 339, 342

    • real sector statistics and, 342–43

    • tax registration and, 100

  • National Development and Reform Commission (NDRC)

    • MTEF and, 16, 117, 122, 131, 136–37

    • SOEs and, 308

  • National People’s Congress

    • local government financing and, 185

    • MTEF and, 16, 122, 133

    • press conferences and, 13

    • Work Program and, 12

  • National Summary Data Page, 339

  • National Tax Administration Standards, 99

  • National Tax Service, 78, 82

  • NBS. See National Bureau of Statistics

  • NDRC. See National Development and

    • Reform Commission; National

    • Development Research Council

  • Nitrogen oxide, 66

  • Nominal MTEF, 135–36

  • Nontraditional lenders

    • arbitrage and, 292

    • in financial sector, 288–300, 289f

    • for local government finances, 290–91

    • risks with, 292, 293t

    • WMPs as, 289f, 290, 292

O

  • OECD. See Organisation for Economic Co-operation and Development

  • Off-budget expenditures

    • local government finances and, 178

    • MTEF and, 131

  • Office of the Leading Group on Economic and Financial Affairs, 13

  • One-child policy, 29

  • Order flow, 274, 274n7

  • Organisation for Economic Co-operation and Development (OECD), 33

    • BEPS and, 96

    • capital gains and, 53

    • corporate income tax and, 55–56

    • environmental taxes and, 62, 65

    • individual income taxes and, 44, 50

    • MTEF and, 136

    • pensions and, 149

    • retirement age and, 154n17

    • social security and, 54

    • tax administration and, 106

    • tax system and, 36

  • Outflow surges, with capital flow liberalization, 242–43

P

  • P2P. See Peer-to-peer lending

  • Paris Agreement, 10

  • Partnerships, taxation of, 58

  • PBC. See People’s Bank of China

  • PE. See Permanent establishment

  • Peer-to-peer lending (P2P), 285

  • Pensions, 155nn19–21

    • baseline projections and sustainability of, 151–53, 152t

    • benchmarks for, 150f

    • benefit formula for, 144, 145t, 155, 159

    • discounted expenditure values for, 158, 158f

    • GDP and, 18, 152–53, 152n11, 153–54, 156n23

    • General Funds Budget and, 157–58

    • increasing contributions to, 155–56

    • indexation of, 155

    • international perspectives on, 149–51

    • labor market and, 153n15

    • life expectancy and, 154, 154n18

    • old age schemes for, 18

    • population aging and, 149–50, 149n9

    • portability of, 157

    • reform options for, 153–58, 154t, 156t

    • retirement age and, 151, 153–55, 153n16, 156n23

    • system of, 144–49, 145t

    • taxation and, 44–49

    • time horizon for, 149n9

    • See also Social security

  • Pensions for Civil Service and Public Unit Workers, 144–48, 145n2, 145t, 147n8

    • contributors to, 155

    • GDP and, 144, 153

    • number of pensioners for, 148f

  • Pensions for Urban and Rural Residents, 145t, 146–47, 147n5, 147n6

    • GDP and, 144, 153, 153n13, 156

    • number of pensioners for, 148f

    • raising benefits for, 156

    • universal coverage for, 151

  • Pensions for Urban Workers and Staff, 145t, 146, 155n19

    • contributors to, 149f, 151

    • expenditures per pensioner for, 148f

    • GDP and, 144, 153

    • number of pensioners for, 148f

    • reducing contribution rates for, 156

  • People’s Bank of China (PBC), 12

    • balance of payments and, 20, 198

    • bond market and, 301

    • capital flow liberalization and, 233, 234

    • CBRC and, 347

    • currency swap agreements and, 270

    • exchange rates and, 269

    • inflation and, 20

    • interest rate corridor by, 203–4

    • interest rates and, 20

    • Macro-Prudential Assessment Framework of, 208

    • Monetary and Financial Statistics Manual by, 345–48, 345n10

    • monetary policy framework and, 20

    • quotas and, 235

    • reserve requirements of, 198, 208

    • RMB internationalization and, 263, 267, 268

    • staffing for, 14

  • Performance measurement system, for SAT, 109, 109n46

  • Permanent establishment (PE), 97

  • Plan to Deepen Reform of the National and Local Tax Administration System, 88

  • Pledged Supplementary Lending, 301

  • Political economy of reforms and institutions, 13–14

  • Pollution

    • air, 10, 66–67

    • social indicators for, 28

    • water, 10

    • See also Environmental taxes

  • Population aging, 124, 124n3

    • MTEF and, 118

    • pensions and, 149–50, 149n9

    • social security and, 17–18, 143

  • Population growth, 28t

  • Portfolio rebalancing, 21–22

  • Poverty reduction, 1, 3, 5, 11

  • PPI. See Producer price index

  • PPPs. See Public-private partnerships

  • Price statistics, 339, 342

  • Principal Global Indicators, 342

  • Private sector

    • AMCs and, 284

    • capital flow liberalization and, 230

    • currency internationalization and, 250

    • MTEF and, 117

    • rebalancing of, 10

    • resources and, 6

    • SOEs and, 10, 318, 327

  • Producer price index (PPI), 338, 339

  • Productivity, rebalancing of, 7

  • Property rights, reforms for, 29

  • Property tax. See Recurrent property tax

  • Public-private partnerships (PPPs), 19

    • emerging risks with, 175

    • for infrastructure projects, 172

    • LGFV and, 171

    • monitoring risks with, 177

    • MTEF and, 131

  • Pupil-student ratios, 28t

Q

  • QFII. See Qualified Foreign Institutional Investor

  • Qualified Domestic Institutional Investor (QDII), 217, 220, 221t, 263

  • Qualified Foreign Institutional Investor (QFII), 220, 221t, 263, 302

  • Quality and Technology Supervision Bureau, 100

  • Quantitative loan limits, interest rates and, 199, 208

  • Quotas

    • capital flow liberalization and, 235

    • for lending, 20

    • SAFE and, 218, 220

R

  • Railway infracture, 28

  • Ramsey, F. P., 61

  • Real estate boom, 19

  • Real MTEF, 135–36

  • Real sector statistics, 342–43

  • Rebalancing, 5–11

    • of consumption, 7

    • of domestic demand, 6, 7f

    • of financial sector governance, 8–10

    • of green growth, 10

    • of inclusive growth, 11, 11f

    • of innovation, 7

    • of local government finances, 8, 10f

    • of portfolios, 21–22

    • of private sector, 10

    • of productivity, 7

    • returns on investment and, 6f, 7

    • to services sector, 7

    • of sustainable leverage, 8

  • Recurrent property tax, 69n14

    • current situation for, 69

    • for local government finances, 33, 69–70

    • proposed reforms for, 69–70

  • Renminbi (RMB)

    • currency swap agreements with, 254

    • depreciation of, 264–65, 265f–266f

    • dollar and, 268

    • exchange rates for, 228–29, 230f

    • FDI and, 252–53

    • foreign exchange markets and, 270

    • foreign holdings in, 254

    • globalization and, 260f

    • in Hong Kong, 267, 268

    • in offshore bond markets, 253–54

    • offshore deposits in, 253, 253f

    • offshore trading in, 254–57, 256f, 257f, 258f

    • repatriation channels for, 267–68

    • in SDR, 30, 222n11, 249, 270, 274–76

    • Shanghai Free Trade Zone and, 268

  • Renminbi (RMB) internationalization, 22–23, 30, 249–76

    • capital flow liberalization and, 221–23

    • in capital markets, 260, 263

    • cross-border payments infrastructure and, 269–70

    • currency swap agreements and, 270

    • deposit insurance and, 269

    • domestic financial reforms for, 268–69

    • exchange rates and, 269

    • IMS and, 271–73, 272t

    • interest rates and, 269

    • lower regulatory barriers for, 263

    • offshore liquidity and, 269–70

    • PBC and, 263, 267, 268

    • policy measures to promote, 260–70, 261t–262t

    • progress in, 258–59, 259f, 260f

    • reserve averaging and, 269

    • shadow banking and, 269

  • Renminbi Qualified Institutional Investor (RQFII), 220, 221, 267

  • Rental income, taxation of, 44, 50, 53–54

  • Reserve averaging, RMB internationalization and, 269

  • Reserve requirements

    • FDI and, 228n15

    • interest rates and, 198, 208

    • macroprudential policy and, 241n28

    • of PBC, 198

    • URR, 237, 239

  • Reserves Data Template, 344

  • Residency-based controls, for capital flow liberalization, 240

  • Residential property price index (RPPI), 339, 342

  • Resolution framework, for local government bonds, 176

  • Resources

    • market allocation of, 11–12

    • misallocation from SOEs, 314–15, 315nn8–10, 317f

    • private sector and, 6

  • Retirement age, 18

    • life expectancy and, 154

    • OECD and, 154n17

    • pensions and, 151, 153–55, 153n16, 156n23

    • Third Plenum and, 153n16

  • Returns on investment, rebalancing and, 6f, 7

  • Risks

    • of capital flow liberalization, 240–43

    • for LGFV, 172

    • local government finances and, 163–78

    • with nontraditional lenders, 292, 293t

    • with PPPs, 175, 178

    • preference mismatch of, interest rates and, 205

    • with shadow banking, 293t

    • See also Compliance risk management

  • RMB. See Renminbi

  • RMB Cross-border Interbank Payment System, 270

  • Rolling MTEF, 134

  • Royalties, taxation of, 53–54

  • RPPI. See Residential property price index

  • RQFII. See Renminbi Qualified Institutional Investor

  • Rural banks, 281

    • lending and deposits of, 286

S

  • SAFE. See State Administration of Foreign Exchange

  • Sales tax, on vehicles, 68

  • SASAC. See State-Owned Assets

    • Supervision and Administration

    • Commission

  • SAT. See State Administration of Taxation

  • Savings rate, 7, 27t

  • SDDS. See Special Data Dissemination Standard

  • SDDS Plus, 336, 339n4, 349

  • SDR. See Special drawing rights

  • Securities companies, 282

  • Self-assessment, for tax administration, 83

  • Service sector, 3

    • GDP and, 86n15

    • rebalancing to, 7

    • taxation of, 78n5

  • Shadow banking

    • interest rates and, 199

    • risks with, 293t

    • RMB internationalization and, 269

    • trusts and, 292

    • WMPs and, 297

  • Shanghai Free Trade Zone, 268

  • Shanghai-Hong Kong Stock Connect, 220, 267

  • Shenzhen-Hong Kong Stock Connect, 30

  • Shocks, spillovers from, 4f

  • Small and medium-sized enterprises (SMEs)

    • corporate income tax for, 57–58, 58t

    • interest rates and, 209

    • WMPs and, 298

  • Small banks, regulatory restrictions on, 205

  • SMEs. See Small and medium-sized enterprises

  • SNA. See System of National Accounts

  • Social indicators, 28t

  • Social safety nets, 15

    • proposed reforms to contributions to, 54

    • reforms in, 29

  • Social security, 17–18

    • current situation with contributions to, 54

    • employer contributions to, 29

    • individual income tax and, 44, 45f, 47f, 54

    • MTEF and, 118

    • reform for sustainability and equity, 143–59

    • taxation for, 49

    • tax wedge for, 54, 157f

  • Social Security Fund Budget, MTEF and, 124

  • SOEs. See State-owned enterprises

  • Soft budget constraints

    • interest rates and, 100, 202–3

    • LGFV and, 100, 202–3, 203n4

  • Sole proprietorships, taxation of, 58

  • Song, Zheng, 153n14

  • Special Administrative Region (SAR). See Hong Kong

  • Special Data Dissemination Standard (SDDS), of IMF, 25, 333, 336

  • Special drawing rights (SDR)

    • balance of payments and, 275

    • RMB in, 22–23, 30, 222n11, 249, 270, 274–76

  • Specialized guarantee agencies, interest rates and, 205–6

  • Spillovers, from shocks, 4f

  • Spring Breeze Project, 100

  • State Administration of Foreign Exchange (SAFE), 216, 216n6, 220, 263

    • exterior sector statistics by, 343–44

  • State Administration of Taxation (SAT), 14, 16

    • Administrative Measures for the

    • General Anti-Avoidance Rules of, 81n10

    • administrative reviews for, 106, 106n44

    • aligning organizational structure with modernization strategy, 93–95

    • arrears collection by, 104–5

    • audits by, 103–4

    • compliance risk management for, 98–99, 98n36, 99n37

    • critical skills gap in, 90

    • default assessments by, 105

    • dispute resolution by, 105–6

    • emerging challenges and opportunities for, 85–90

    • extending national and international reach of, 95–98, 95nn32–33

    • filings and payments to, 101–2

    • globalization and, 87–88

    • human resources for, 83–84, 106–7

    • information technology for, 84–85, 90, 107–8

    • installment arrangements with, 104, 104n43

    • Large Business Department of, 93, 93n27, 94–95, 95nn30–31

    • master-files for, 96, 96n34

    • new legislation for, 88

    • organizational stresses in, 89, 94

    • organization of, 11, 82–83, 83t

    • performance measurement system for, 109, 109n46

    • process enhancement for, 99–106

    • processes of, 83

    • strengthening, 75–111

    • structural changes in economy and, 86–87

    • tax evasion and compliance and, 77, 78–79, 81, 81n10

    • tax liens of, 104–5

    • taxpayer registration and, 100

    • taxpayer services of, 100–101

    • TCL and, 81, 92

    • uniformity of administration in, 89–90

    • VAT and, 60n11

  • State Budget, 16

    • MTEF and, 124

  • State capital investment, in SOEs, 318, 326f

  • State Council

    • Development Research Center of, 86n15

    • economic decisions by, 12–13

    • Legislative Affairs Office of, 92

    • local government financing and, 185

    • monetary policy framework and, 20

    • MTEF and, 16, 122, 135n3, 138

    • PPPs and, 171

    • SASAC of, 308, 308n2

    • SOEs and, 25

    • TCL and, 92

  • State-Owned Assets Supervision and Administration Commission (SASAC), 308, 308n2

  • State-owned banks, 291

    • lending and deposits of, 286

  • State-Owned Enterprise Fund Budget, 124

  • State-owned enterprises (SOEs), 5

    • assessment of current reform plans, 320–22

    • bad loans of, 284

    • in bond market, 301

    • capital flow liberalization and, 218

    • capital gains and, 320t

    • case studies of, 328–29

    • classification of, 318, 323n19

    • competition in, 323

    • corporate leverage and, 309–14, 312t, 313f, 314f

    • credit growth and, 8

    • current reform plans for, 316–20, 319t–320t

    • debt of, 314

    • entrusted loans and, 295

    • FDI and, 218, 218n8

    • framework for, 24–25

    • implicit support for, 315–16, 317f

    • improving efficiency of, 318

    • inefficiency of, 308–9, 309f, 310f–311f

    • interest rates and, 192, 208–9

    • key indicators of, 312t

    • land use by, 316n12

    • macroeconomic statistics and, 26

    • misallocation of resources by, 315–16, 315nn8–10, 317f

    • parameterization of data for, 330

    • pilot programs for, 321, 321t

    • private sector and, 10, 318, 327

    • reform of, 307–30

    • reforms for, 29, 324f, 330t

    • soft budget constraints and, 100

    • state capital investment in, 318, 326f

    • tax administration and, 77n1, 83

    • unemployment and, 327, 327f

  • Statistics Department, of IMF, 348n11

  • Steel industry, 25

  • Stiglitz, J. E., 61

  • Structural vector autoregressive models (SVAR), 194–95, 195n1

    • interest rates and, 211–12

    • for yield curves, 200

  • Sulfur dioxide, 66

  • Sustainable leverage, rebalancing of, 8

  • SVAR. See Structural vector autoregressive models

  • System of National Accounts (SNA), 334–35, 334n1

T

  • Targeted allowances, for individual income tax, 51

  • Tax administration, 16, 92nn23–26

    • administrative assessment of, 83

    • aligning organizational structure with modernization strategy, 93–95

    • background of, 76–80

    • critical skills gap in, 90

    • current situation for, 80–85

    • emerging challenges and opportunities for, 85–90

    • future reform priorities for, 90–100

    • GDP and, 76, 77t, 78, 79f

    • globalization and, 87–88

    • human resources for, 83–84

    • information technology for, 84–85, 90, 107–8

    • of local government finances, 77, 77n3

    • for multinational corporations, 97

    • new legislation for, 88

    • organizational stresses in, 89, 94

    • organization of, 82–83, 83t

    • process enhancement for, 99–106

    • processes of, 83

    • self-assessment for, 83

    • slowing economic growth and, 85–86

    • SOEs and, 77n1, 83

    • strengthening, 75–111

    • structural changes in economy and, 86–87

    • taxpayer population and, 81, 82t

    • uniformity in, 89–90

    • United States and, 88n19

    • See also State Administration of Taxation

  • Taxation

    • on air pollution, 66–67

    • of capital gains, 57f, 59

    • of capital income, 49–50, 71

    • by central government, 36–37

    • on consumption, 78n6

    • lump-sum, 61, 62

    • pensions and, 44–49

    • on property, 70

    • on vehicles, 68

    • See also Business turnover tax; Corporate income tax; Recurrent property tax; Value-added tax; individual income tax

  • Tax Collection Law (TCL), 80–81, 90

    • amendments to, 91–93, 104, 105

  • Tax evasion and compliance, 75–78, 77n2

    • in global financial crisis, 86n14

    • SAT and, 77, 78–79, 81, 81n10

    • with VAT, 78, 78n8, 79f

    • See also Compliance risk management

  • Tax liens, 104–5

  • Taxpayer population, 81, 82t

  • Taxpayer Services Department, of SAT, 93

  • Tax policy, 15–16

    • changes to, 77n1

    • direct tax reforms to, 38–59

    • indirect tax reforms to, 60–70

    • modernizing, 33–71

    • reforms to, 34t–35t

  • Tax sharing, 8, 37, 39t–40t, 41f, 165f–167f, 168, 179t

  • Tax system

    • air pollution and, 66

    • efficiency of, 42

    • environment and, 10

    • human resources and, 106

    • overview of, 36–38, 37f–38f

    • simplification of, 50

    • taxpayer satisfaction with, 80t, 89

    • See also State Administration of Taxation

  • Tax treaties, 97, 97n35

  • Tax wedge

    • for individual income tax, 46f

    • for social security, 54

    • social security and, 157f

  • TCL. See Tax Collection Law

  • Third Plenum, 5, 12

    • MTEF and, 117

    • pensions and, 156

    • retirement age and, 153n16

    • SOEs and, 24–25

    • tax administration and, 91, 91n20

  • 13th Five-Year Plan, 5

    • capital flow liberalization and, 215n2, 232

    • environmental taxes and, 62

    • macroeconomic statistics and, 348

    • monetary policy and, 191

    • MTEF and, 117

    • SOEs and, 24–25

    • tax administration and, 91

    • tax policy and, 33

  • Time horizon

    • for MTEF, 17, 122, 124, 126, 134, 140

    • for pensions, 149n9

  • Tobacco, taxation of, 61

  • Top-down forecasting, for MTEF, 128

  • Total social financing (TSF), 346, 347

  • Trade surplus, tax administration and, 77n1

  • Transfer pricing rules, 96

  • Transparency

    • Budget Law and, 19

    • improvements in, 12–13

    • in local government finances, 187

  • Triffin’s dilemma, 271

  • Trusts, 282, 282nn2–3, 291

    • as intermediating product, 292–93

  • TSF. See Total social financing

U

  • Unemployment, 27t

    • from SOE reform, 327, 327f

  • Unemployment insurance, 156n25

    • taxation for, 49

  • Uniform Social Credit Code, 100

  • Unirule Institute of Economics, 315n8

  • United Kingdom

    • DGI and, 353f

    • e-commerce of, 87

    • insolvency framework for, 12f

  • United States

    • bond yield in, 20, 200, 201t

    • capital gains in, 186f

    • DGI and, 353f

    • dollar of, 251n1, 268, 272

    • e-commerce of, 87

    • environmental taxes in, 63f

    • insolvency framework for, 12f

    • money supply in, 192–93

    • MTEF in, 121–22

    • specialized guarantee facilities in, 205–6

    • tax administration and, 88n19

    • tax system and, 36

    • tax treaties with, 97n35

  • Unremunerated reserve requirement (URR), 237, 239

  • Urban households, individual income tax for, 48f

  • Urbanization, recurrent property tax and, 70

  • URR. See Unremunerated reserve requirement

V

  • Value-added tax (VAT), 15, 16, 36, 77n1

    • audits of, 103, 103n42

    • from business turnover tax, 33, 60, 60n11

    • current situation for, 60

    • filings and payments to, 101–2, 101n40, 102n41

    • financial sector and, 62

    • GTP for, 84

    • information technology for, 108

    • proposed reform of, 60–62

    • refund mechanism for, 60

    • registration threshold for, 62

    • shared by central and local government finances, 37

    • tax evasion and compliance with, 78, 78n8, 79f

    • tax rates for, 60

    • transition to, 60–62

  • Vehicle taxes, 68

  • Voluntary Trading Arrangements, 275

W

  • Water pollution, 10

  • Wealth management products (WMPs), 285–86, 296–98

    • arbitrage and, 292

    • bond market and, 300

    • CBRC on, 296–97

    • equity markets and, 303

    • for local government finances, 291

    • as nontraditional lenders, 289f, 290, 292

  • WEN Jiabao, 5

  • Wholesale funding, 299–300

  • WMPs. See Wealth management Products

  • Work Program, 12

  • World Bank

    • credit information systems and, 206

    • environmental taxes and, 62

    • MTEF and, 126

  • World exports and imports, China’s share of, 335f

  • World Health Organization, 10

    • environmental taxes and, 62

  • World Trade Organization (WTO), 5, 13

    • capital flow liberalization and, 217

    • RMB and, 252

    • SOEs and, 321

  • WTO. See World Trade Organization

X

  • Xiaokang, 3

  • XI Jinping, 13, 320

  • Xinren, 147

Y

  • Yield curves, 200

  • Yu’ebao, 285–86

Z

  • Zhongren, 147