Notice of the State Council Municipality on Printing and Distributing Several Policies for Promoting the High-quality Development of Integrated Circuit Industry and Software Industry in the New Period

The State Council on printing and distributing the new period to promote the integrated circuit industry and

Notice of some policies on high-quality development of software industry

Guo Fa [2020] No.8

People’s governments of all provinces, autonomous regions and municipalities directly under the Central Government, ministries and commissions and institutions directly under the State Council:

The "Several Policies for Promoting the High-quality Development of Integrated Circuit Industry and Software Industry in the New Period" are hereby printed and distributed to you, please earnestly implement them.

the State Council

July 27, 2020

(This piece is publicly released)

Promoting integrated circuit industry and software industry in the new period

Some policies for high-quality development

Integrated circuit industry and software industry are the core of information industry, and they are the key forces to lead a new round of scientific and technological revolution and industrial transformation. Since the issuance of the Notice of the State Council on Printing and Distributing Policies to Encourage the Development of Software Industry and Integrated Circuit Industry (Guo Fa [2000] No.18) and the Notice of the State Council on Printing and Distributing Policies to Further Encourage the Development of Software Industry and Integrated Circuit Industry (Guo Fa [2011] No.4), China’s integrated circuit industry and software industry have developed rapidly, which has strongly supported the national information construction and promoted the sustained and healthy development of the national economy and society. In order to further optimize the development environment of integrated circuit industry and software industry, deepen industrial international cooperation, and enhance industrial innovation ability and development quality, the following policies are formulated.

First, fiscal and taxation policies

(1) Enterprises or projects that are encouraged by the state to produce integrated circuits with a line width of less than 28 nanometers (inclusive) and have been in operation for more than 15 years shall be exempted from enterprise income tax from the first year to the tenth year. Enterprises or projects that are encouraged by the state to produce integrated circuits with a line width of less than 65 nanometers (inclusive) and an operating period of more than 15 years are exempted from enterprise income tax from the first year to the fifth year, and the enterprise income tax is levied at a statutory rate of 25% in the sixth to tenth years. Enterprises or projects that are encouraged by the state to produce integrated circuits with a line width of less than 130 nanometers (inclusive) and have been in operation for more than 10 years shall be exempted from enterprise income tax from the first year to the second year, and enterprise income tax shall be levied at the statutory tax rate of 25% in the third to the fifth year. Losses incurred by integrated circuit manufacturing enterprises whose line width is less than 130 nanometers (inclusive) encouraged by the state in the tax year are allowed to be carried forward to the following years, and the longest summary transfer period shall not exceed 10 years.

For those who enjoy preferential tax policies according to integrated circuit manufacturing enterprises, the preferential period shall be calculated from the profit-making year; For those who enjoy preferential tax policies in accordance with integrated circuit production projects, the preferential period is calculated from the tax year in which the project obtains the first production and operation income. The list of integrated circuit manufacturers or projects encouraged by the state shall be formulated by the National Development and Reform Commission and the Ministry of Industry and Information Technology in conjunction with relevant departments.

(2) Enterprises engaged in integrated circuit design, equipment, materials, packaging and testing and software encouraged by the state shall be exempted from enterprise income tax from the first year to the second year, and the enterprise income tax shall be reduced by half at the statutory tax rate of 25% from the third year to the fifth year. The conditions for enterprises engaged in IC design, equipment, materials, packaging and testing encouraged by the state shall be formulated by the Ministry of Industry and Information Technology in conjunction with relevant departments.

(3) Key integrated circuit design enterprises and software enterprises encouraged by the state shall be exempted from enterprise income tax from the first year to the fifth year, and enterprise income tax shall be levied at a reduced rate of 10% in subsequent years. The list of key integrated circuit design enterprises and software enterprises encouraged by the state shall be formulated by the National Development and Reform Commission and the Ministry of Industry and Information Technology jointly with relevant departments.

(four) the conditions and scope of preferential income tax policies implemented by the state for integrated circuit enterprises or projects and software enterprises shall be dynamically adjusted according to the progress of industrial technology. The enterprise income tax of integrated circuit design enterprises and software enterprises in the previous year before the implementation of this policy shall be implemented in accordance with the preferential policy of "two exemptions and three reductions" specified in document No.4 [2011] of the State Council.

(five) continue to implement the preferential policies of value-added tax for integrated circuit enterprises and software enterprises.

(6) In a certain period of time, the production enterprises of logic circuits and memories with integrated circuit linewidth less than 65 nm (inclusive), and the production enterprises of characteristic process integrated circuits with integrated circuit linewidth less than 0.25 micron (inclusive) (including the production enterprises of masks and 8-inch and above silicon wafers) shall be exempted from import duties; Production raw materials and consumables imported by compound integrated circuit manufacturers and advanced packaging and testing enterprises with integrated circuit line width less than 0.5 micron (inclusive) are exempt from import duties. Specific policies shall be formulated by the Ministry of Finance in conjunction with the General Administration of Customs and other relevant departments. The list of enterprises and the list of duty-free commodities shall be formulated by the National Development and Reform Commission and the Ministry of Industry and Information Technology jointly with relevant departments.

(7) Within a certain period of time, the key integrated circuit design enterprises and software enterprises encouraged by the state, as well as the integrated circuit production enterprises and advanced packaging and testing enterprises mentioned in Article (6) shall be exempted from import duties, as well as the technology (including software) and accessories and spare parts imported with the equipment according to the contract, except for the goods listed in the relevant import catalogue that are not duty-free. Specific policies shall be formulated by the Ministry of Finance in conjunction with the General Administration of Customs and other relevant departments.

(eight) in a certain period of time, the import of new equipment for major integrated circuit projects is allowed to pay the import value-added tax in installments. Specific policies shall be formulated by the Ministry of Finance in conjunction with the General Administration of Customs and other relevant departments.

II. Investment and financing policies

(nine) to strengthen the service and guidance of major integrated circuit projects, orderly guide and standardize the development order of integrated circuit industry, do a good job in planning and layout, strengthen risk warning, and avoid low-level redundant construction.

(10) Encourage and support integrated circuit enterprises and software enterprises to strengthen resource integration. Relevant departments and local governments in the State Council should actively support and guide the reorganization and merger of enterprises in accordance with the principle of marketization, and shall not set various forms of restrictions other than laws, regulations and policies.

(eleven) make full use of the existing national and local government investment funds to support the development of integrated circuit industry and software industry, encourage social capital to raise funds through multiple channels according to the principle of marketization, and set up investment funds to improve the marketization level of funds.

(12) Encourage local governments to establish a loan risk compensation mechanism, and support integrated circuit enterprises and software enterprises to obtain commercial loans through intellectual property pledge financing, equity pledge financing, accounts receivable pledge financing, supply chain finance, science and technology and intellectual property insurance. Give full play to the role of financing guarantee institutions and actively provide various forms of financing guarantee services for small and micro enterprises in the fields of integrated circuits and software.

(13) Encourage commercial financial institutions to further improve financial services, increase medium and long-term loan support for the integrated circuit industry and the software industry, actively innovate credit products suitable for the development of the integrated circuit industry and the software industry, and increase financial support for major projects on the premise of controllable risks and sustainable business; Guide insurance funds to carry out equity investment; Support bank wealth management companies, insurance, trusts and other non-bank financial institutions to initiate the establishment of specialized asset management products.

(14) Vigorously support qualified integrated circuit enterprises and software enterprises to go public and raise funds at home and abroad, and speed up the domestic listing review process. R&D expenditures that meet the relevant conditions of the Accounting Standards for Business Enterprises can be capitalized. Encourage and support qualified enterprises to list and raise funds in science and technology innovation board and Growth Enterprise Market, and smooth the exit channels of original shareholders of related enterprises. Provide equity financing, equity transfer and other services for integrated circuit enterprises and software enterprises at different stages of development through different levels of capital markets, expand direct financing channels and increase the proportion of direct financing.

(15) Encourage qualified integrated circuit enterprises and software enterprises to issue corporate bonds, corporate bonds, short-term financing bonds and medium-term notes, broaden financing channels for enterprises, and support enterprises to raise funds from the bond market through medium-and long-term bonds.

Third, research and development policies

(16) Focus on the research and development of key core technologies of high-end chips, integrated circuit equipment and technology, key materials of integrated circuits, integrated circuit design tools, basic software, industrial software and application software, and constantly explore and build a new national system for tackling key core technologies under the conditions of socialist market economy. The Ministry of Science and Technology, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other departments do a good job in organizing and implementing the relevant work, and actively use the national key R&D plans and major national science and technology projects to give support.

(seventeen) in the fields of advanced storage, advanced computing, advanced manufacturing, high-end packaging and testing, key equipment materials, new generation semiconductor technology, etc., combined with the characteristics of the industry to promote the construction of various innovative platforms. The Ministry of Science and Technology, the National Development and Reform Commission, the Ministry of Industry and Information Technology and other departments give priority to supporting relevant innovation platforms to implement R&D projects.

(eighteen) to encourage software enterprises to implement national standards such as software quality, information security, development and management. Strengthen the organization construction of integrated circuit standardization, improve the standard system, strengthen standard verification, and enhance research and development capabilities. Improve the quality of integrated circuits and software and enhance the competitiveness of the industry.

Iv. import and export policies

(19) In a certain period of time, key integrated circuit design enterprises and software enterprises encouraged by the state need to temporarily import self-use equipment (including development and test equipment), software and hardware environment, prototypes, parts and components, and those that meet the requirements can go through the customs formalities for temporarily entering the country, and their import tax shall be implemented in accordance with existing laws and regulations.

(20) Financial institutions may provide financing and insurance support for software export contracts signed between software enterprises and foreign enterprises with higher credit ratings in accordance with the principles of independent loan review and risk control.

(twenty-one) to promote the export of integrated circuits, software and information technology services, vigorously develop international service outsourcing business, and support enterprises to establish overseas marketing networks. The Ministry of Commerce, together with relevant departments, will establish a long-term cooperation mechanism with key countries and regions and take comprehensive measures to create conditions for enterprises to expand into emerging markets.

V. Talent policy

(twenty-two) to further strengthen the construction of integrated circuit and software specialty in colleges and universities, accelerate the setting of integrated circuit first-level disciplines, adjust the curriculum, teaching plan and teaching methods in a timely manner in close connection with the needs of industrial development, and strive to cultivate compound and practical high-level talents. Strengthen the construction of integrated circuit and software professional teachers, teaching laboratories and practice training bases. The Ministry of Education will strengthen supervision and guidance with relevant departments.

(twenty-three) to encourage qualified universities to cooperate with integrated circuit enterprises to accelerate the construction of demonstration microelectronics colleges. Give priority to building and cultivating integrated enterprises in the field of integrated circuits. If the investment in vocational education of the pilot enterprises that are included in the scope of the construction and cultivation of production-education integration enterprises meets the requirements, the education surcharge and local education surcharge that should be paid by the enterprise in the current year can be credited according to the proportion of 30% of the investment. Encourage social-related industrial investment funds to increase investment, and support joint ventures in colleges and universities to carry out the construction of special resource libraries for IC talent training. Support demonstration microelectronics colleges and characteristic demonstration software colleges to cooperate with internationally renowned universities and multinational companies, introduce foreign teachers and high-quality resources, and jointly cultivate talents in integrated circuits and software.

(twenty-four) encourage local governments to commend and reward high-end talents who have made outstanding contributions in the field of integrated circuits and software, as well as high-level engineers and R&D designers, and improve the equity incentive mechanism. Through relevant talent programs, we will increase efforts to introduce top experts, outstanding talents and teams. Priority should be given to exploring relevant policies for introducing talents in integrated circuits and software in industrial clusters or related industrial clusters. Formulate and implement the annual plan for the introduction and training of integrated circuit and software talents, promote the construction of the national international training base for integrated circuit and software talents, and focus on strengthening the medium and long-term training of professionals in urgent need.

(twenty-five) to strengthen industry self-discipline, guide the rational and orderly flow of integrated circuits and software talents, and avoid vicious competition.

VI. Intellectual Property Policy

(twenty-six) encourage enterprises to register the exclusive rights of integrated circuit layout design and software copyright. Support integrated circuit enterprises and software enterprises to apply for intellectual property rights according to law, and give relevant support to those who meet the relevant provisions. Vigorously develop integrated circuits and software-related intellectual property services.

(twenty-seven) strictly implement the intellectual property protection system for integrated circuits and software, and increase the punishment of intellectual property infringement violations. Strengthen the protection of the exclusive right of layout design of integrated circuits and software copyright under the network environment, actively develop and apply the network copyright protection technology of genuine software, and effectively protect the intellectual property rights of integrated circuits and software.

(twenty-eight) to explore the establishment of a long-term mechanism for software legalization. All computers (including mainframe computers, servers, microcomputers and notebook computers) sold in China must be pre-installed with genuine software, and computers pre-installed with non-genuine software are prohibited from going on sale. We will fully implement the policies and measures for government agencies to use genuine software, implement centralized government procurement of general-purpose software, and strengthen the management of software assets. Promote the institutionalization and standardization of the use of genuine software in important industries and key areas. Strengthen the publicity, training, supervision and inspection on the use of genuine software, and create a good environment for the use of genuine software.

Seven, the market application policy

(twenty-nine) through policy guidance, market application as the traction, increase the promotion of integrated circuits and software innovative products, and promote the continuous upgrading of technology and industry.

(thirty) to promote the development of integrated circuit industry and software industry cluster, support the construction of information technology service industry cluster and integrated circuit industry cluster, and support the development of software industry park with characteristics and high end.

(31) Support key enterprises, research institutes, universities and other innovative subjects in the field of integrated circuits and software to build various specialized innovation service institutions represented by specialized creative space, optimize the allocation of innovative resources such as technology, equipment, capital and market, and provide specialized services focusing on integrated circuits and software in accordance with the market mechanism, so as to realize the integrated development of large, medium and small enterprises. Increase support for specialized service platforms such as specialized creative space, technology business incubators and university science parks serving the integrated circuit and software industries, and enhance their professional service capabilities.

(thirty-two) actively guide the development of information technology research and application services outsourcing. Government departments are encouraged to entrust qualified software and information technology service institutions with the services that are within the scope of government responsibilities and suitable for market-oriented services in e-government construction, data center construction and data processing by purchasing services. Pay close attention to the formulation and improvement of corresponding safety review and confidentiality management regulations. Encourage large and medium-sized enterprises to rely on information technology to develop and apply business institutions and set up specialized software and information technology service enterprises.

(thirty-three) improve the protection system of consumer privacy and business secrets under the network environment, and promote the development of software and information technology services in the network. Promote software products and services that meet safety requirements in government agencies and institutions at all levels.

(34) further standardize the market order of the integrated circuit industry and the software industry, strengthen anti-monopoly law enforcement, crack down on various monopolistic behaviors according to law, do a good job in the anti-monopoly review of operators, and maintain fair competition in the integrated circuit industry and the software industry market. Strengthen law enforcement against unfair competition and crack down on all kinds of unfair competition according to law.

(thirty-five) give full play to the role of industry associations and standardization organizations, speed up the formulation of standards related to integrated circuits and software, and popularize the standards for quality evaluation of integrated circuits and cost measurement of software development.

VIII. International cooperation policy

Deepen the global cooperation between the integrated circuit industry and the software industry, and actively create a good environment for international enterprises to invest and develop in China. Encourage domestic universities and research institutes to strengthen cooperation with overseas high-level universities and research institutions, and encourage international enterprises to build R&D centers in China. Strengthen communication between domestic trade associations and international trade organizations, support domestic enterprises to cooperate with international enterprises at home and abroad, and deeply participate in the division of labor and cooperation in the international market and the formulation of international standards.

(thirty-seven) to promote the integrated circuit industry and software industry to "go global". It is convenient for domestic enterprises to jointly build R&D centers overseas, and make better use of international innovation resources to enhance the level of industrial development. The National Development and Reform Commission, the Ministry of Commerce and other relevant departments will improve their service level and create a good environment for enterprises to carry out investment and other cooperation.

IX. Supplementary Provisions

(38) All qualified integrated circuit enterprises (including design, production, packaging, testing, equipment and materials enterprises) and software enterprises established in China, regardless of the nature of ownership, can enjoy this policy.

(thirty-nine) this policy is interpreted by the National Development and Reform Commission in conjunction with the Ministry of Finance, the State Administration of Taxation, the Ministry of Industry and Information Technology, the Ministry of Commerce, the General Administration of Customs and other departments.

(forty) this policy shall be implemented as of the date of issuance. Continue to implement the policies specified in document No.18 [2000] and No.4 [2011] of the State Council. If the relevant policies are inconsistent with this policy, this policy shall prevail.

Autumn children have loose bowels, beware of rotavirus as a demon.

  Among children with diarrhea under 5 years old in China, about 40% of hospitalized cases are caused by rotavirus, and 30% of outpatient cases are caused by rotavirus. Li Dandi, a researcher at the Center for Virus Prevention and Control of the Chinese Center for Disease Control and Prevention, recently reminded that diarrhea in autumn is not as simple as a cold stomach. Rotavirus infection is the real cause of diarrhea, and it is the most important pathogen of severe diarrhea in infants. According to the World Health Organization, in 2013, nearly 220,000 children under 5 died of rotavirus infection.

  Zhang Zhu, deputy director of the Department of Gastroenterology, Beijing Hospital, also reminded that rotavirus is particularly active in autumn, and it recurs every year, usually from August to December, and the most active period in the north is October and November. Rotavirus diarrhea is highly contagious, not only through the digestive tract, but also through the respiratory tract. Therefore, children with rotavirus infection often have respiratory symptoms, such as fever and cough, accompanied by particularly severe watery diarrhea. This watery diarrhea may be like egg flower soup, but it has no abnormal odor. This is a typical rotavirus infection. Rotavirus may be accompanied by some food poisoning, including Escherichia coli, which are diseases that children are particularly susceptible to in autumn.

  What emergency treatment should parents do if the child suddenly has abdominal pain? Zhang Zhu said that taking rotavirus as an example, most viral enteritis can heal itself, and there can be a slow recovery process in about one to two weeks. However, children will lose some water and salt in the process, so it is particularly important for parents to deal with it scientifically.

  First of all, don’t eat antibiotics indiscriminately. For example, quinolones can affect children’s cartilage development, and children under 16 are not recommended to eat them, because parents’ indiscriminate use of drugs may bring more serious problems to children.

  Oral rehydration salts are more practical. It is recommended that families with babies can prepare some oral rehydration salts, which can reasonably supplement the loss of fluids in children’s bodies and supplement certain electrolytes such as potassium, sodium and chlorine. What if there is no rehydration salt at home? You can use orange juice bought in the supermarket to heat and sterilize, and then add a little salt. Because orange juice contains a lot of potassium chloride, plus a little sodium chloride, potassium, sodium, chlorine and other lost electrolytes are available; Orange juice contains high sugar and is a good calorie supplement for children with diarrhea.

  Liu Cuiying, deputy director of the Department of Infectious Diseases of Beijing Children’s Hospital, reminded that the symptoms of rotavirus infection are the most serious for the first time. Parents should not think that rotavirus infection is ordinary diarrhea. Once they find that their children have typical loose stools, or that they have no tears when crying, and their skin is relatively dry, or that they have persistent high fever, a lot of mucus or blood in their stools, acute abdominal pain, and their children are depressed or unable to feed water and food, they must go to the hospital in time.

Power rent-seeking is getting worse, and the real estate industry has become the hardest hit by collusion between officials and businessmen.

  Editor’s Note: Today’s real estate industry in China is the hardest hit by collusion between officials and businessmen. Jiang Renjie, the former vice mayor of Suzhou, took bribes of more than 100 million yuan, mainly from real estate developers. Recently, it is far more than this one who has been pulled down by developers: Zhu Zhigang, the former vice minister of finance, was "double-regulated" and helped his relatives buy low-priced houses, involving many people in the real estate industry in Beijing; Liu Zhihua, the former vice mayor of Beijing, was sentenced to death with a suspended sentence for taking bribes of nearly 7 million yuan. He accepted a lot of bribes from real estate developers … The arms of corrupt officials "warmed" real estate developers, and the wealthy real estate developers "fed back" individual officials again and again. The essence behind this "mutual benefit" is only two words: power and benefit.


  There are deep roots behind the fact that officials are willing to do anything for developers at the risk of guillotine.


  Why are individual officials keen to be "friends" with developers? Why is the problem of illegal land getting worse and worse? In fact, as long as there is soil or space for power rent-seeking, corruption will grow like weeds cut one after another, which has been clearly verified in the real estate market. Originally, there was a "symbiosis" phenomenon between developers and urban construction officials. Developers were both "performance promoters" of individual urban construction officials and "troublemakers" who induced corruption. When the two sides share the same rotten tastes, they often form an "interest alliance", and land development has thus become a high-risk area for corruption. There are deep roots behind the fact that individual officials are willing to do anything for developers at the risk of going to the guillotine.


  The government plays a dual role; The hierarchical administrative structure makes the power lack of restraint.


  To a certain extent, the government plays a dual role. On the one hand, the government, as the representative of public interests, formulates policies, regulates economic activities and acts as a referee. The government has the power to examine and approve infrastructure, industry, real estate and other projects. The construction of these projects requires land. Some unscrupulous developers want to obtain low-priced land and rent from individual government officials who can’t resist the temptation.


  On the other hand, the government has a huge amount of resources and directly participates in economic activities as a subject and acts as an athlete. All local governments shoulder the heavy responsibility of developing local economy. In the performance evaluation of local government officials, GDP is the most critical indicator, which intensifies their impulse to manage land. Because they can only use land to attract investment, set up industrial parks and carry out infrastructure construction. In these activities, the pricing power of land resources is in the hands of relevant officials. Even the public bidding and auction of land can not completely overcome the transfer of interests. The direct investment attraction of individual local party and government departments is more likely to aggravate the difficulty of curbing land violations and corruption.


  In addition, the hierarchical administrative structure makes the top leaders of local governments and the direct leaders in charge of land have too much power and lack of supervision and checks and balances. China’s land authorities are land departments at all levels, but the land department is a subordinate department of the government. The director of land and resources should be led by the deputy mayor in charge, and the deputy mayor in charge should be led by the mayor and the secretary. If the deputy mayor, mayor and secretary in charge directly grant land or intervene in land transactions, it will be difficult for the land department to effectively restrain them, and the discipline inspection and supervision departments will also encounter difficulties and resistance when investigating. High-ranking officials who are dismissed because of land corruption are basically deputy mayors and district heads in charge of land, urban construction or major construction projects. Unrestricted power naturally leads to corruption.


  The relevant laws do not strictly define the public interest.


  On the one hand, the constitution stipulates that urban land belongs to the state and rural land belongs to farmers’ collectives, which means that all the new land needs of urbanization and industrialization, whether the needs of public interests or non-public interests, must be met through the state’s land acquisition behavior (that is, transforming rural collectively owned land into state-owned land); On the other hand, the constitution also emphasizes that the state can only expropriate or requisition agricultural land for the needs of public interests.


  It is precisely because the relevant laws do not strictly define the public interest, and the government must expropriate farmers’ land for non-public welfare needs such as economic development and urban construction. Although many land expropriation acts of individual local governments are illegal, the judicial department usually refuses to accept most legal proceedings caused by illegal land expropriation by the government, which to some extent opens the door for land corruption of individual local government officials.


  Except for a few stocks of state-owned land, all new urban construction land must be acquired through land acquisition, and the main body of land acquisition is only the government. The circulation of village collective land is strictly restricted to agricultural use, so the government has mastered the supply of construction land. In the case of rising demand, developers understand that only by "fixing" government officials can they obtain land at a lower cost. This is why some government officials "wave upon wave" fall on land violations. Monopoly of land supply has created institutional space for individual corrupt officials to use land for illegal interests.


  Under the tax-sharing system, local governments are constantly looking for income from outside the budget, and land lease income is not included in the financial budget management.


  After the implementation of the tax-sharing system in 1994, the central government quickly took the leading position, and its concentration capacity became stronger and stronger, and its concentration ratio became higher and higher, accounting for about 55% of the total tax revenue. The central government is rich in money and the local government is poor in money, but the pattern of division of powers between the central and local governments has not changed much. Local governments use about 45% of their relative fiscal revenue to support about 75% of their relative expenditure responsibilities. This induces local governments to constantly look for sources of income from outside the budget. When local governments found that land was an important way to make money, they began to sell land to raise financial revenue for themselves.


  The tax classification of the tax-sharing system also gives local governments an incentive to develop the real estate industry and constantly push up housing prices. According to the tax-sharing arrangement, urban land use tax, property tax, stamp duty, land value-added tax, paid use income of state-owned land and other taxes are collected by local governments. Therefore, the more active the real estate market is, the more this part of tax revenue will be. This has stimulated the impulse of local governments to develop the real estate industry and collected a large number of agricultural land to develop the real estate industry. While the real estate industry is developed, the pockets of government officials who control the land are more "developed".


  Li Jinhua, former auditor general of the National Audit Office, reported that in 2005, 60 of the 87 development zones in China illegally sold land at low prices. In order to "attract investment", in the State Council, it is forbidden to sell land at a low price, so some places take the means of signing a land transfer contract in accordance with state regulations, and then returning the land transfer fee or giving financial subsidies to sell land at a low price in disguise. This not only enables individual officials and enterprises to transfer benefits to each other, but also leads some enterprises to maliciously occupy and resell land. Take land income as extra-budgetary income and evade the supervision of the National People’s Congress.


  Countermeasures: Give the power of land resources allocation to the market, laws and systems.


  In order to solve the "collusion" between officials and developers and fundamentally reverse this situation, we must take a multi-pronged approach, start with the system, legal system and mechanism, introduce and improve external supervision, and hand over the power of land resource allocation to the market, law and system. Some suggestions are put forward.


  It is necessary to cut off the hand of government officials reaching out to the land. First of all, it is necessary to reduce the government’s intervention in microeconomic activities, especially to fundamentally change the behavior of individual local governments in using land to accumulate wealth, accumulate wealth and generate wealth, ban land finance, and all state-owned land transfer fees will be included in the fiscal budget. Establish an official’s property and income declaration system, and the part and consumption that exceed the statutory income will be determined as illegal income unless the source can be explained.


  Reform the land expropriation system and strictly demarcate the boundaries of public interests. Strictly stipulate the land acquisition procedures, even if it is a public land acquisition, we should raise the compensation standard for land acquisition in public interest, give reasonable and fair compensation to the land-expropriated farmers, and enable farmers to share the fruits of industrialization and urbanization.


  Strengthen the supervision and restraint of the main leaders of the land management department and the government. Simple moral preaching is not enough. It is necessary to introduce various social forces (especially the masses and news media) into the mechanism to supervise the power of officials and strengthen the transparency of land transactions. Standardize the procedures of land auction, auction and transfer, clarify the trading rules and improve the market operation.


  Change the pattern of interest distribution between the central and local governments. Make the respective powers and financial rights of the central government and local governments correspond, and reverse the internal motivation of local governments to make money by borrowing land. Reform the current tax-sharing system, re-divide the distribution ratio of the current shared tax, and appropriately increase the sharing ratio of local governments (such as value-added tax). (The author is Cai Jiming, director and professor of Tsinghua University Political Economy Research Center)

Good news is coming! The latest voice of the General Administration of Financial Supervision is related to real estate financing!

On January 26th, the General Administration of Financial Supervision held a meeting to deploy and promote the implementation of the coordination mechanism of urban real estate financing.

The two departments held a meeting on the same day to deploy a coordination mechanism for urban real estate financing.

Earlier on the same day, the Ministry of Housing and Urban-Rural Development also held a deployment meeting of urban real estate financing coordination mechanism, requiring all localities to study and put forward a list of real estate projects that can be given financing support, coordinate the issuance of loans by financial institutions within their respective administrative areas, and accurately and effectively support reasonable financing needs. It is understood that before the end of this month, the first batch of projects can win loans after landing.

On January 12th, the Ministry of Housing and Urban-Rural Development and the General Administration of Financial Supervision jointly issued the Notice on Establishing the Coordination Mechanism of Urban Real Estate Financing (hereinafter referred to as the Notice), requiring cities at or above the local level to establish the coordination mechanism of urban real estate financing.

The working meeting held by the General Administration of Financial Supervision pointed out that the coordination mechanism is an important measure to implement the decision-making arrangements of the Central Financial Work Conference, meet the reasonable financing needs of real estate enterprises with different ownership equally, and promote the virtuous circle of finance and real estate.

Specifically, the Notice clarifies that the coordination mechanism, based on the development and construction of real estate projects and the qualifications, credit and finance of project development enterprises, puts forward a list of real estate projects that can be given financing support in accordance with the principle of fairness and justice, and pushes it to financial institutions within their respective administrative regions. Financial institutions shall evaluate the support objects pushed by the coordination mechanism according to the principles of marketization and rule of law, and actively meet the reasonable financing needs for projects with normal development and construction, sufficient collateral, reasonable assets and liabilities and guaranteed repayment sources; For projects that encounter temporary difficulties in development and construction, but the funds can be balanced, we should not blindly draw loans, pressure loans or cut off loans, but give greater support through the extension of existing loans, adjustment of repayment arrangements and new loans.

Li Yujia, chief researcher of the Housing Policy Research Center of Guangdong Urban and Rural Planning Institute, pointed out that the purpose of establishing a coordination mechanism this time is to establish a docking platform so that both banks and enterprises can fully communicate, and whether or not loans still need to follow the bank risk control and credit approval process.

Strengthen the closed management of funds and prevent misappropriation.

Xiao Yuanqi, deputy director of the General Administration of Financial Supervision, made a "notice" when he attended the press conference on high-quality economic and social development of financial services held by the State Council yesterday. Recently, the General Administration of Financial Supervision will hold a relevant work deployment meeting, asking banks to act as soon as possible, and under the lead coordination of the urban people’s government, together with the housing and construction departments, make good use of the policy toolbox because of the city’s policy, and more accurately support the reasonable financing needs of real estate projects.

The General Administration of Financial Supervision pointed out that the coordination mechanism should strengthen information sharing and provide relevant financial institutions with information such as project construction and operation and pre-sale fund supervision in a timely manner. It is necessary to guide financial institutions to negotiate with real estate development enterprises on an equal footing, make independent decisions and implement them according to the principles of marketization and rule of law, and protect the legitimate rights and interests of financial institutions.

At the same time, the General Administration of Financial Supervision stressed at this meeting that financial institutions should attach great importance to it, strengthen organizational leadership, establish internal mechanisms and clarify working rules. For projects that meet the credit conditions, it is necessary to establish a green channel for credit granting, optimize the approval process, shorten the approval time limit, and actively meet the reasonable financing needs. For projects that encounter temporary difficulties in development and construction, but the funds are basically balanced, we will not blindly lend, cut off loans, or press loans, but support them by extending existing loans, adjusting repayment arrangements, and adding new loans. At the same time, financial institutions should strengthen the closed management of funds to prevent the misappropriation of credit funds.

"All supervision bureaus should actively participate in the coordination mechanism, actively cooperate with local governments and housing construction departments, carry out related work in a steady and orderly manner, jointly promote the effectiveness of the coordination mechanism and promote the stable and healthy development of the real estate market." The General Administration of Financial Supervision said.

Editor: Wang Yunpeng

Proofreading: Li Lingfeng

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