Chapter 12 3.4 Decentralized Finance and Economics, Disconnected Income and Expenditure

Finance and economics are scattered, income and expenditure are out of touch, and financial estimates are in danger of being broken.Chen Yun shouted: The key to preventing large price fluctuations is to unify finance and rectify income and expenditure. The decisive victory in the battle against speculative capital has greatly reduced the risk of a global price surge.At the same time, with the exception of Tibet, all mainland China was liberated, and military expenses, the largest and most uncontrollable financial burden, were greatly eased.In this way, the biggest obstacle to completely eliminating inflation and stabilizing prices is the fragmentation of finances and the disconnection of income and expenditure.This situation makes it difficult for the central fiscal revenue to be truly controlled and expenditures to be unbalanced. In order to make up for the deficit, it is necessary to engage in fiscal issuance, which leads to continued rises in prices and even the risk of violent fluctuations.

Chen Yun believes that it is time to solve this problem. However, the local finance and economic cadres, who have been used to having their own share for many years, have no idea about Uni-President Finance and Economics.When it comes to unification, it emphasizes a lot of difficulties.Why can't guarantee the expenditure of the lower level in time, affect the enthusiasm of the lower level cadres, and so on.Chen Yun feels that it is necessary to guide everyone to look at the problem from the overall situation, fully understand the possibility and necessity of unified finance and economics, and solve everyone's doubts.

From February 13 to 25, 1950, the first national fiscal conference after the founding of New China was held in Beijing. On the 13th, Chen Yun spoke at the meeting and proposed to unify finance and economics. Chen Yun said that the key problem now is that the income and expenditure agencies are out of touch. The income is mainly at the provincial and county levels. During the meeting, Chen Yun also talked to the leaders of the financial committees of the various regions to do work.He first approached the cadres of the East China Finance Committee, and asked them bluntly, whether to unify the rich or the poor first?East China is a relatively affluent area in the country, but in the struggle to stabilize prices in the early days of liberation, they also received the most support from the whole country, and they have a deep feeling for the importance of financial unification.Chen Yun had also done their work before, so they said without hesitation: Of course, they should control the wealth first.

The rich areas are in favor of unification first, and the poor areas are better at doing work.Therefore, the meeting successfully unified the understanding on the unification of national financial and economic work.The meeting decided to save expenditures, reorganize revenues, and manage national financial and economic work in a unified manner, so as to achieve a balance of national fiscal revenue and expenditure, a balance of material supply and demand, and financial price stability. After the meeting, Chen Yun drafted the "Decision on Unifying National Financial and Economic Work" for the Government Council. On March 3, it was discussed and approved at the 22nd meeting of the Government Affairs Council.

The most important measure of the "Decision" is to unify the national fiscal revenue and expenditure, material dispatching and cash management. Part of it will be transferred to the state treasury to ensure the unified use of state revenue. Such a huge change in the financial system will inevitably arouse ideological shock and doubts among financial cadres at all levels.For this reason, Chen Yun published an editorial "Why Unify Financial and Economic Work" in "People's Daily" on March 10, answering people's questions. Chen Yun concluded that as long as the decision of unified finance and economics is strictly implemented, the financial situation will gradually improve after a few months of difficulties.In fact, the speed at which the financial situation improved was far beyond Chen Yun's expectations.On the basis of unified management of finance and economics, the financial and economic departments will sort out revenues and expenditures and reduce deficits.The state's fiscal revenue increased sharply (the annual revenue increased by 31.7% compared with the original estimate), and expenditures decreased relatively. In April 1950, a new situation appeared in which the national fiscal revenue and expenditure were close to balance.

Under the leadership and support of the Central Committee of the Communist Party of China, through the hard work of the financial and economic departments, a major turning point has taken place in the national financial and economic situation. On June 6, 1950, Mao Zedong announced, "The series of victories we have achieved on the economic front, such as the close balance of fiscal revenue and expenditure, the cessation of inflation and the stabilization of prices, etc., show that the financial and economic situation has begun to improve. " Mao Zedong spoke highly of this campaign and its leader Chen Yun.Bo Yibo recalled: "By April 1950, the national economic situation began to improve, and there was a gratifying phenomenon that the income and expenditure were close to balance and market prices tended to be stable. I remember that when I reported to Chairman Mao once, I mentioned that Comrade Chen Yun was in charge of the China Finance Department. The work of the Committee is very effective, and it is always courageous to do what it sees right. After hearing this, Chairman Mao said, oh, I have not seen it in the past. I repeated it. Chairman Mao listened, but did not say anything , he picked up a pen and wrote the word "neng" on a piece of paper. I asked, did the word "neng" you wrote refer to Zhuge Liang's words in "The Former Master" describing Liu Bei's praise of Xiang Chong:' General Xiang Chong, good-natured, well-versed in military affairs, tried it in the past, and the late emperor said it could...' Chairman Mao nodded. Later, Chairman Mao also said that the significance of stabilizing prices and unifying finance and economics is no less than that of Huaihai Battle'."