The 5th Finance and Economics Development Forum was Successfully Held in Beijing, Focusing on the Full Implementation of Performance Management

On June 9, 2018, the Fifth Finance and Economics Development Forum co-sponsored by China Public Finance Research Institute of Shanghai University of Finance and Economics and People's Weekly of the People's Daily, was held in the West Building of the People's Daily. With the theme of “Government and Finance in the New Era: Full Implementation of Performance Management”, this forum focused on the relationship between government performance and government governance innovation, finance and taxation policies, and performance management assessment methods. 13 leaders from government departments including the Budget Working Committee of the National People's Congress, the Ministry of Finance, the National Audit Office, and the local finance and taxation departments, as well as scholars in the field of finance and taxation from more than 40 universities and research institutes such as Renmin University of China, China National School of Administration, and Peking University, and media reporters from over 10 media, totally 150 persons, attended the forum. The first half of the forum was hosted by Prof. Liu Xiaochuan, Executive Dean of China Public Finance Research Institute of Shanghai University of Finance and Economics.

      Prof. Jiang Chuanhai, the President of Shanghai University of Finance and Economics, attended the opening ceremony and delivered a speech. In his speech, Prof. Jiang Chuanhai first expressed his appreciation to the People's Daily for its full support of the forum and introduced the achievements of the China Public Finance Research Institute since its establishment in 2012 in terms of financial development and fiscal transparency, as well as the promotion of legislative work such as the Budget Law and the Financial Law under the support of the Ministry of Finance and other relevant ministries and commissions

Mr. Dong Wei, the proprieter of People’s Daily Publishing House, delivered a speech on behalf of Zhang Shouying, deputy editor-in-chief of People’s Daily. He pointed out that the full implementation of budget performance management was an inevitable requirement for recommending national governance capabilities in the new era. Therefore, discussing this issue today had urgent practical significance. In August 2016, People's Daily and China Public Finance Research Institute of Shanghai University of Finance and Economics jointly established the China Financial and Economic Development Research Center, a financial and economic think tank institution. In the recent two years, experts and scholars in the financial and economic think tank had provided many expert suggestions for the People's Daily for internal reference. He expressed his gratitude and wished the Finance and Economic Development Forum a success.

Mr. Liu Xiuwen, Deputy Director of the Budget Working Committee of the Standing Committee of the National People's Congress, delivered a final speech. He pointed out that finance was of great significance to national governance, and fiscal budget performance management was the key factor to improving national governance. Budget review and supervision was an important responsibility of the National People's Congress and local people's congresses at all levels, and was an important means of promoting law-based administration of government. On March 3 this year, the General Office of the CPC Central Committee issued the No.15 Document of 2018, proposing three aspects of comprehensive implementation of performance management, namely, highlighting the performance supervision of major investments, targets setting and results definition of performance, and performance monitoring of government transfer payments. To this end, the Budget Working Committee of the National People's Congress planned to further promote financial performance management, which was the significance of this forum.

After a brief opening ceremony, the forum entered the first sub-theme – discussion of government governance innovation and performance management. The keynote speech at this session was delivered by Mr. Wang Kebing, the Deputy Director of the Budget Department of the Ministry of Finance, and Prof. Liu Xiaobing, Dean of the School of Public Economics and Administration of Shanghai University of Finance and Economics.

Wang Kebing, the Deputy Director, pointed out that the evaluation of government performance had undergone several changes, from the government performance assessment of leading cadres at the beginning of the reform and opening up to the exploration of budget performance management at the beginning of this century, then to the acceleration of budget performance management because of the implementation of the new Budget Law after the 18th National Congress, and to the comprehensive implementation of budget performance management proposed at the 19th National Congress. The reason why this issue was important was that the public goods provided by the government might be wasted, and the management of public goods was more difficult than enterprise management, and the research on this was relatively lagging. At present, China's economy had entered a new normal, fiscal revenue growth has generally slowed down, there were pressures for tax and administrative fees reduction, and expenditures were rigid, so the fiscal system was in a operation mode of tight balance. At the same time, the expenditure structure had unreasonable expenses, the appropriation expenditures were inefficient, and there were double soft constraints on budget and performance. This was why it was now necessary to propose comprehensive implementation of budget performance management. Wang Kebing, the Deputy Director proposed that the comprehensive implementation of budget performance management should be guided under three full which are full orientation, full process and full coverage.

Prof. Liu Xiaobing first reviewed the historical background of comprehensive implementation of budget performance management, and systematically elaborated on the full implementation of budget performance management from five aspects: definition, goal, evaluation, results application and implementation. As far as the objectives of performance management were concerned, it was necessary to determine whether to do it or not, and to determine who would decide the problem and who would review it. In the evaluation process, in addition to evaluating whether the goal was achieved, it was also necessary to evaluate whether it was really necessary to use so many financial expenditures for achieving it. For the results application, it was recommended to perform cross-regional performance horizontal comparisons for the same type of department.

The round table at this stage was presided over by the Researcher Gao Peiyong, the Vice President of the Chinese Academy of Social Sciences. Gao Peiyong combined with the budget performance management proposed by the Deputy Director Wang Kebing and the “full-coverage” concept proposed by Prof. Liu Xiaobing to ask Mr. Yao Sheng, the former Deputy Director of the Budget Working Committee of the National People's Congress, on the implementation of the full-scale budget management in 2008. Yao Sheng believed that the current “four budgets” had basically achieved full-scale and full coverage, but for performance management, it was currently limited to projects and transfer payments without achieving full coverage. Mr. Wang Yida, inspector of the Policy Research Office of the Ministry of Finance was asked about the question for the difference in the handling of the four budgets in the new Budget Law that the general public budget requirements were more detailed, while the other three budgets requirements were a little rougher. In this regard, Wang Yida, an inspector, said that this issue has remained yet to be resolved by the implementation regulations of the new Budget Law. In addition, Wang Yida also expressed that the “comprehensive implementation” orientation had been unanimous, but there were difficulties in implementing them specifically, especially to cover all departments. Zhou Zhiren from the School of Government Administration of Peking University reviewed the evolution process of the wording of performance management in government documents. He pointed out that although various references were made, no specific legal documents or government regulations were implemented, and there was no specific responsible agency, even no effective implementation plan. He suggested that the comprehensive implementation of budget performance management should be started from the application of performance evaluation, such as the impact of performance evaluation acts on the promotion of officials. Mr. Hao Shuchen, the Director of the Department of Public Finance Audit of National Audit Office, pointed out that the pilot project for self-assessment full coverage of central project capital and the third-party evaluation of special transfer payments had been implemented. However, regardless of the situation, most self-assessments were full marks, making the evaluation formalized. Mr. Jiang Jianping, the Chairman of the Jiangsu Provincial People's Congress Financial and Economic Committee, proposed that performance evaluation should be carried out simultaneously at the macro and micro levels, and it was necessary to do as much as your resources and pay attention to the order of priorities for the issues. Xu Zhengzhong, a professor from the Party School of the Central Committee of the Communist Party of China (the China National School of Administration), proposed that performance evaluation should be divided into operational performance and policy performance. The former is currently operated, while the latter has not yet been entered the discussion stage.

The second half of the meeting was hosted by Feng Xudong, editor-in-chief of People's Weekly, People's Daily. Experts and scholars made statements and discussed on the two themes of “Finance and Tax Policy and Performance Management” and “Performance Management Evaluation Method”.

The forum entered the second sub-theme – discussion of Finance and Tax Policy and performance management. The keynote speech at this session was made by Liu Xutao, a Prof. at the Party School of the Central Committee of the Communist Party of China (the National School of Administration) and Yang Kaifeng, the Dean of the School of Public Administration, Renmin University of China.

Prof. Liu Xutao said that there were many local performance management works to be done. To sum up, there were two types. One was internal control type, which was more convenient for the internal leadership management of the system, providing the leader with the grasping and pushing hands, and the other was the external control type. External control was to be responsible for the society and to help the society and citizens to monitor and evaluate the performance of the government. Both paths were important for performance management.

Starting from budget and performance management, Prof. Yang Kaifeng said that it should begin from performance management to performance governance. At the institutional level, we must consider high-standard coordination agencies, strengthen the top-level design with the idea of meta-governance, and govern the “jungle” and isolated islands of performance management. In addition, we must create an overall institutional environment, which includes planning, civil servants. The awards of civil servants just mentioned in which the structural reform of civil servants, cadre management systems, data sharing, and strengthening the assessment of governance performance, institutional performance, and policy performance were involved.

The round table of the second sub-theme was hosted by the Prof. Liu Xiaochuan, Executive Dean of China Public Finance Research Institute of Shanghai University of Finance and Economics. Prof. Liu Xiaochuan said that the government's performance can be roughly divided into two categories, one was called soft performance and the other was called hard performance. Soft performance was to examine the government's management efficiency, and whether the government's law enforcement was fair or not; hard performance was to examine how much money the government had mastered, and whether the money was well used. Ma Caichen, a Prof. at the School of Economics of Nankai University, stressed that in the process of comprehensive implementation of performance management, due to the attention to evaluation indicators, the experience of VAT general taxpayers and small-scale taxpayers should be used to double 286, which could effectively reduce the cost of comprehensive evaluation. Prof. Lei Lianghai, secretary of the Party Committee of the School of Management, University of Shanghai for Science and Technology, said that comprehensive performance management should firmly grasp the three links, namely transparent norm, scientific standard, and effective restraint. Among transparent norm should be prioritized and adhered throughout the whole process of comprehensive budget management. Tian Shuying of the School of Economics of Anhui University put forward the concept of “promoting efficiency through management, promoting excellence through management, and promoting construction through management”. Hu Lanfang, inspector of the State Administration of Taxation in Shanghai Municipal, believed that in the implementation of performance management, after this policy was formulated, the propaganda, effect analysis, and implementation evaluation were required in the policy implementation process, and then to be continuously improved. Finally, Prof. Fu Wenlin, Deputy Dean of the School of Public Economics and Administration of Shanghai University of Finance and Economics, stressed the need to strengthen data disclosure and encouraged the spontaneous participation of media and academic institutions.

Upon the conclusion of the second sub-theme round table, Gao Qiang, the Dean of China Public Finance Research Institute of Shanghai University of Finance and Economics, delivered an important speech. Gao Qiang also said that it’s shoulder heavy responsibility for the management of government performance or the performance management of government budget. And there was still a long way to go to implement it in accordance with the goals and requirements put forward by the central government. First of all, it was necessary to change the long-standing traditional concept of emphasizing speed and scale, but ignoring quality and benefits. Especially now, we still faced many difficulties. Expecting the situation of continuous high growth for several decades and the continuous high growth of fiscal revenue as before was difficult. Some cases were unclear. Therefore, we could not rely on this blind method for a long time. Second, we must improve the system to achieve full coverage, full orientation, and the full process. Full coverage referred to covering all aspects of the government, or covering all aspects of the budget only; The full process referred to performance management implementation throughout a complete system, namely from budget preparation to budget approval to budget execution, to final accounting compilation and final accounting approval. We must persist in budgeting more meticulously, deeply, accurately and transparently, strengthening the construction of professional budgeting agencies and teams, and strengthening and refining the personnel strength of the budgeting department, which was an indispensable part of the implementation of comprehensive budget performance management, and made us constrain each other in the aspects of budget preparation, budget execution, budget supervision and decision-making. In addition, we must improve the link of review and supervision, including the internal review of the financial department; they must have a process of self-monitoring and self- correction. There were supervision from government department, and the National People's Congress.  The National People's Congress should implement supervision in the whole process of budget preparation, budget approval, budget execution, and final accounting compilation. The supervision from the society was particularly important, including the supervision from public opinion and the masses.

Dean Gao stressed that for the comprehensive implementation of performance management, we could not be vague in and could not retreat from the overall goal, but we must persist and push forward unswervingly. However, the specific work could not be pushed one step at a time. We must choose some key points and have different goals every year. We must plan in the long run steadily based on the current situation. Every year, there were some new goals requiring continuous advancement. As a result, after 5 years and even 10 years, it would be possible to establish a government budget performance management system featured by relative perfect, scientificity, normalization and binding effect, which would be a very significant contribution to China's long-term development.

    Subsequently, a keynote speech on the third sub-theme of the forum was delivered. Prof. Ma Guoxian from China Public Finance Research Institute of Shanghai University of Finance and Economics stressed the need to build a performance budget framework, which was just mentioned above，oriented by the departmental performance budget; to establish a project approval system to control the budget items; to establish a performance-linked budget approach while implementing standardized management of public services.

Pro. Zheng Fanghui from the School of Public Administration of South China University of Technology said that performance should be derived from internal management, but it was the basic tool of democratic culture. Performance expenditures included the performance of fiscal expenditures, and its basic philosophy pursued the credibility of public finances. The ending point of performance was the satisfaction of the people and the satisfaction of the public.

The round table of the third sub-theme was hosted by Prof. Guo Qingwang from the Financial and Monetary Institute of Renmin University of China. Prof. Guo Qingwang said that budget performance management should be a breakthrough in the performance management of the entire government, and reform should be carried out from top to bottom. Lou Meifang, Director of the Financial Supervision Bureau of Zhejiang Provincial Department of Finance, combined with the experience in Zhejiang Province, proposed to pay attention to the full integration of performance and budget preparation, implementation and supervision. Within the scope of the funds of the general public budget, a budget management system of whole process with a target for budget preparation, monitoring for budget execution, evaluation for budget completion, and application for evaluation results had been basically established. Song Wenyu, the Deputy Director of the Budget Evaluation Center of the Ministry of Finance, believed that it was necessary to establish a new model of budget-based government performance management, to clarify the main body of responsibility, and to achieve a combination of point and plane. Prof. Wang Jinxiu from Zhongnan University of Economics and Law believed that budget, finance and accounting were important instrumentalities for performance management. These two technical supports and two major pushers were advancing new public management and government performance reform. It was necessary to actively improve evaluation indicators, establish service standards, and build informationalized services. Xu Yunxiao, an associate professor from the School of Economics of Peking University, said that for the project expenditure of the public people's livelihood in the project budget, it should focus on allocation performance, output performance and achievement performance. For such projects of construction type, more emphasis was placed on economic benefit evaluation in which, of course, the principle of analogy and classification was used, and economic evaluation method is preferred. Gao Qi, Deputy Dean of the School of Finance and Taxation of Southwestern University of Finance and Economics, believed that the reason why the project is unable to be evaluated due to too large and vague goal is that that the project evaluation was also done by the third party wholly, and the third party did not know what to do, either; As a result, it generally extracted the latest government work report and project report as the project target to declare, and the data is another reason, of which the accuracy and scientificity was inconsistent in statistical scope of each department. Associate Prof. Ma Zhiyuan, the Director of the Financial Performance Management Research Center of China Public Finance Research Institute of Shanghai University of Finance and Economics analyzed the connotation and value orientation of budget performance and performance budget, emphasizing that the result orientation could not be used to determine the deviation of the target.