Administrative Institutions Docking Problem Of State-owned Assets Management And Budget Management

Ever since the f oundation of New China 60 years ago, especially during the 30 years after reform and opening up, China has seen rapid economic development, which has led to rapid growth of fiscal revenue. With the continuous increase of financial resources and public demand, China's state-owned assets administrative units also achieved rapid growth. According to the Ministry of Finance, as of December 31,2009, state-owned assets of China' s administrative institutions reached 10.4 trillion yuan, with net assets amounted to 6.9 trillion. The quality of state-owned assets management of administrative institutions is closely related to the reform of public services system, the fiscal reform, the budget management reform, the reform of government institutions, etc. Therefore, better managing and utilizing the enormous amount of state-owned assets in administrative institutions is an important and urgent task placed in front of the party and the government.The Seventeenth National Party Congress pointed out clearly the goal "to improve state assets management system". On July 2006, according to the spirit of the Seventeenth Congress of the CPC, the Ministry of Finance introduced the "two commands", marking the new stage of state-owned asset management of administrative institutions. Since then, the financial sector, competent departments and administrative units at all levels, have developed a series of measures for implementation, and have achieved progress and achievements in institutional rationalization, asset use, asset disposal, dynamic monitoring and performance appraisal.However, the problem of matching asset management and budget management, which is core of state assets management, has not been well addressed."Asset management and budget management mismatch" seriously deterred the deepening of budget management reform and asset management reform. Both theory and practice have shown that asset management and budget management are indispensable components of financial management and are different forms of financial management.Financial fund is transformed into state-owned assets via budget appropriation. Budget objectivity and fairness directly determines quality of configuration and management of state-owned asset, which in turn determines the rationality and fairness of expenditure structure. Therefore, effective connection between asset management and budget management is necessary.But such connection involves all aspects of both sides and thus is a complex system which needs the principle of "high focus, practical start". It requires starting from asset allocation management, then promoting the progressive items related, and finally forming a connecting mechanism of asset management and budget management. This paper will provide a comprehensive analysis of the background of asset management and budget management connecting as well as sort out key issues, identify the target, and offer operable policy recommendation promote the process of the asset management.