China’s Reform Of Centralized National Treasury Collection And Payment System

Before scattered national treasury collection and payment system changes to a centralized treasury collection and payment system in China, the focus of the national treasury has been running the government budget revenue and expenditure for the provision of services, and plays a government "cahier" role, so that a single accounting model of national treasury operation mode results in dispersion of national financial resources, lower efficiency of financial funds payment, weakening the government’s financial functions, and is not conducive to centralized control.With the pace of public finance system construction projects in the background of the socialist market economy, the Chinese national treasury begins to run the system of the overall government budget funds managing national treasury. The decentralized national treasury collection and payment system changes to be a centralized treasury collection and payment system. In March16,2001, the Ministry of Finance, the People’s Bank of China jointly promulgated the "treasury management reform pilot program" to provide a direct legal supply of a centralized treasury payment system reform, and began to reform collection and payment system.According to the pace of national treasury institutional change, as early as1940s, foreign scholars, based on their own framework of the established political system, began a wide range of related research on national treasury collection and payment system. As to research on the domestic point of view, in the early1990s, many scholars put forward the vision of reforming national treasury system, and constructing the state treasury single account system. Then, many theory scholars and staff of substantive studied the importance, the role and problems of the reform of the state treasury, and put forward many relevant countermeasures from the different perspectives such as, to strengthen the management treasury cash deposits, control the risk of treasury funds, foreign advanced experience of revelation, and research summaries and analysis,etc. However, In general, the research of domestic treasury system reform in China is still a preliminary study. Most of them are the analysis of defects, for reference, to propose a solution or analysis of shallow description on the effectiveness of a particular unit, more comprehensive study on the system less, its shortcomings and deficiencies as follows:first for the centralized national treasury collection and payment, distributed system, the demand and supply of treasury system, many of the concepts have been used in literature, but less clearly defined, and the use of these concepts seem blurred. Second, from a theoretical point of view, a comprehensive analysis of the theoretical basis is still not deep enough about a centralized treasury payment system reform. Third, evaluation of achieved results about reform of the treasury system is very little empirical analysis, but also rarely seen a more comprehensive reform of the effectiveness of evaluation system. Fourth, as the new treasury system reform process, the corresponding supporting measures and the development of the larger economic environment, China’s centralized treasury payment system and the corresponding measures should be improved. In this paper, a centralized treasury system reform in China as the research object, institutional change theory, public finance theory, public choice theory, principal-agent theory, theory of economies of scale in new institutional economics as a guide, drawing on international treasury collection and payment system reform theory and practical theory experience, the logic of mechanism process China’s treasury reform, the existing problems and the effectiveness of reform are analyzed in depth and comprehensively, and relevant policy recommendations are put forward in an attempt to further the state treasury system reform vision.In addition to the introduction of the first chapter, this paper can be divided into seven parts:The first part (chapter2) is the concepts definition and introduction of the relevant theoretical concepts based. In this chapter, the definition of the treasury, the treasury system, the supply and demand of treasury system, the scattered treasury payment system, and a centralized treasury payment system are clearly given; in this chapter the author makes brief instruction of theories including its theory of public finance, public choice theory, new institutional economics, the principal-agent theory, economies of scale, and analyzed the combination with the international treasury system.This part Lays the groundwork for the full study. The second part (Chapter3,4) is the empirical analysis section. Chapter III is the general experience of foreign countries, which is analyzed and gets how to reform a centralized treasury payment system in China; The fourth chapter analyzes the changing process of our national treasury system and the specific content of treasury collection and payment system, from historical vertical experience to get enlightenment at this stage of our reforms in China.The third part(chapter5)first uses demand-supply theory of institutional change. The economic model of demand-supply demand for treasury system is constructed. The supply of treasury system has rigid requirements in the state treasury system. At a larger increment of time, for demand-supply of treasury system, the supply of treasury system (national) in order to avoid a "huge loss" will innovate and change the treasury system. Then, based on this model, the author analyzes changes in demand and supply of treasury system in order to analyze changes from scattered treasury payment system for the collection and payment system to a centralized treasury payment system in depth, and promote the requirements aspects of a centralized treasury payment system including:the amount of revenue and expenditure operations increasing needs, the needs to enhance the ability of macro-control, the management absence of the traditional treasury management system, financial capital security, building public finance system, effective implementation of financial macro-control policy needs from the banking system caused changes; supply-side factors are:Net interest-driven by top decision makers, information network technology advances, the department budget system reform, the foreign successful experiences of the implementation of a centralized treasury payment system. Then again the author analyzes why we choose our way of promoting the progressive reform of the treasury system. Treasury collection and payment system reform is a complex and comprehensive system engineering, for the consideration of costs and sharing of system innovation, we choose progressive way of reform. At present, China’s centralized treasury payment system reform is the transition period from the second phase (system selection phase) to the third phase (the system setting the stage)The fourth part (Chapter6) constructs an analytical framework of a centralized treasury payment system reform and the effectiveness, makes empirical analysis of the case based on a prefecture-level data. The treasury system reform has brought greater economic efficiency and management effectiveness. The results of this part validates the third part of the treasury institutional change demand-supply model, because after this stage of reform, that is, in the framework of a centralized treasury collection and payment system, compared with the traditional decentralized collection and payment system, the supply of additional treasury system is much more (information networks invest more, to achieve more treasury related functions, etc.), the demand of treasury system, is also met a higher level (providing the conditions for improving the mechanism of the control and budget.).The treasury system tends to a higher level of equilibrium.The fifth part (Chapter7) analyzed the forecast and the optimal holding quantity of treasury cash balance account. Since our country implemented Treasury Single Account System,, a lot of cash "gathering" on the treasury account, so that the treasury cash balance management has become a "new" problem. Treasury cash management in China is still in a very preliminary stage.Through this chapter’s research, we can.Confirm that the variable (cash item) itself has strong regularity and periodicity of data columns, change the variable impact of changes by the early significant variables. Ideas can be based on data mining, according to previous trends, forecasts the trend of late, which is consistent with this prior expectations; addition, according to Miller-Orr cash balance management model was the best measure of cash holdings, real cash Stock idle more, the opportunity cost of a larger adjustment needs to be optimized.The sixth part (Chapter8) is problem analysis at this stage of the reform and corresponding policy recommendations, which is the direction to further promote reform of the treasury taken into account in this paper. There are still problems of Centralized treasury collection and payment system at this stage, which is the gap with the ultimate goal of the reform. They are:the main division of agency settings is not clear, normative single account to be improved; the diameter range of national treasury is not uniform, complicated operational income and expenditure, repeat procedures more, and there are some potential risks; relatively large number of idle deposits treasury fund, increasing the opportunity cost of funds and monetary policy, the provision of accurate budget information adversely affected; after the controls, internal control mechanism of national treasury has some flaws; the legal system of perfect treasury reform, the improvement of electronic information systems platform and improving the quality of staff are all concern of further reforms. In this paper, the author proposes suggestions for consideration on international experience with working experience on the reform of China’s centralized treasury payment system problems at this stage, including:a clear legislative mandate and to pay a reasonable cost to commercial bank for treasury agent; a standard single account should be to set up for level and area, strictly regulate the liquidation of zero-balance account; to compress unnecessary duplication of audit and other aspects, reducing the tedious process of treasury revenues and expenditures of the business; try to give the central bank treasury departments the right to issue short-term debt within a certain amount, combined with the monetary policy to conduct treasury cash management; real-time amendment,"the State Treasury Regulations" and "Regulations","Budget Law","Accounting Law" and its implementation rules, and a series of supporting legal system, etc,using modified accrual accounting records of the budget and so on.Part VII (Chapter9) is conclusions and further research prospects. The conclusions of analysis are summarized, and the future exploration is put forward.