1. Land finance worsens national income distribution and inhibits private investment. At the beginning of this century, some financial experts pointed out that at that time, the Chinese government's various revenue combined accounted for more than 30% of GDP, reaching or even exceeding the level of developed countries. The high proportion of government revenue in GDP has, on the one hand, led to slow income growth for residents, especially farmers, and on the other hand, inhibited social investment. Although the central government has taken many measures to vigorously adjust the national income distribution pattern, there has been no fundamental change so far. What is particularly noteworthy is that most land revenue is concentrated in cities, and the urban-rural and regional gaps have not narrowed, but have widened.
2. Government investment has affected the adjustment of industrial structure and aggravated overcapacity. Where the large amount of funds controlled by the government is invested plays an important role in guiding changes in the industrial structure. Over the years, local government land transfer revenue has been mainly invested in urban construction, which has stimulated the great prosperity of the construction and real estate industries, driven the development of building materials, civil appliances, civil hardware, civil chemicals and other industries, resulting in serious excess production capacity. This industrial chain is basically at the low end. Excessive development takes up a lot of social resources and runs counter to the central government's policy of accelerating the transformation of development methods.
3. What cannot be ignored is the serious waste of resources and funds. Land transfer revenue is "self-received and self-supported" by the government at the same level, and there has been a long-term lack of revenue and expenditure regulations and supervision mechanisms. In recent years, many "buildings, halls, halls, institutes" and "achievement projects" have been built in various places. The trend of comparison has become more and more fierce, and the people hate it deeply. In this process, a small number of party and government cadres have deep pockets, spend money like water, and do whatever they want; at the same time, "land rent-seeking" activities have become more and more intense, and it is not uncommon for public funds to be turned into personal "gray income", and the public has reacted strongly.
4. Without changing the land financial mechanism, protecting cultivated land and protecting farmers’ legitimate land rights and interests can only be empty talk. At the same time, land finance makes local governments overly dependent on real estate developers for their revenue. In reality, in China, since collective land cannot be used to develop real estate, existing developers are actually in a natural monopoly position, which makes it possible to significantly raise housing prices. It is difficult to solve the housing problem of the majority of low- and middle-income citizens.
Warm reminder: The above information is for reference only and does not make any recommendations.
Response time: 2020-12-29. For the latest business changes, please refer to the official website of Ping An Bank.
[I know about Ping An Bank] Want to know more? Come and take a look at "I Know Ping An Bank"~
/paim/iknow/index.html