The reporter learned from the Ministry of Finance that, in accordance with the decisions and arrangements of the Party Central Committee and the State Council, in order to establish a transfer payment incentive and restraint mechanism to promote high-quality development, the Ministry of Finance will focus on promoting the use of existing incentive funds, establishing incentive funds to promote high-quality development, and strictly implementing various restraint mechanisms. Fiscal transfer payments refer to the funds allocated by higher-level governments to lower level governments without compensation, including transfer payments from the central government to local governments and transfer payments from local higher-level governments to lower level governments. They are mainly used to solve regional fiscal imbalances and promote equalization of basic public services between regions. In recent years, the Ministry of Finance has been deeply promoting the reform of the fiscal and taxation system, continuously improving the fiscal transfer payment system. The scale of transfer payments from the central government to local governments has increased from 4.5 trillion yuan in 2012 to 10.2 trillion yuan in 2024, effectively promoting regional coordinated development and equalization of basic public services. The Third Plenum of the 20th Central Committee of the Communist Party of China proposed to establish an incentive and restraint mechanism for transfer payments to promote high-quality development, increase local independent financial resources, and expand local tax sources. Industry experts have stated that further strengthening the current transfer payment system to incentivize and constrain local governments, fully mobilizing local development enthusiasm, is conducive to stimulating the enthusiasm of local officials to start businesses, improving the scale and quality of fiscal revenue, and building a more reasonable and orderly relationship between the central and local governments. The recently held executive meeting of the State Council heard a report on establishing an incentive and restraint mechanism for transfer payments to promote high-quality development. The meeting pointed out that we should give full play to the guiding role of transfer payments in promoting high-quality local development, and arrange incentive funds to tilt towards regions with large tax contributions and fast income growth. We need to implement mechanisms in a scientific and standardized manner, encourage localities to cultivate tax sources through high-quality development, enhance local development initiative and fiscal sustainability. According to the Ministry of Finance, in order to establish an incentive and restraint mechanism for transfer payments to promote high-quality development, efforts will be made from three aspects. ——Continue to make good use of existing incentive funds. In the transfer payment funds from the central government to local governments, we will continue to allocate provincial-level incentive funds to encourage and guide local governments to improve their financial systems, increase financial support for difficult areas, and improve the balance of county-level financial resources; Continue to arrange incentive funds for the urbanization of agricultural transfer population, and motivate localities to provide equal basic public services for agricultural transfer population. ——Establish incentive funds to promote high-quality development. Based on local practical experience, the central government will separately allocate incentive funds for promoting high-quality development from existing transfer payments starting from 2024. By establishing this new incentive fund, local governments will be incentivized to expand their fiscal revenue 'cake', improve the scale and quality of fiscal revenue, and promote the realization of healthy and sustainable fiscal development The relevant person in charge of the Budget Department of the Ministry of Finance said. ——Strictly implement various constraint mechanisms. Strengthen budget execution constraints, urge local governments to strictly implement the budget approved by the National People's Congress, strictly prohibit exceeding the budget or no budget expenditures, and implement unified and standardized accounting management of budget indicators. Strengthen budget performance constraints, continue to focus on major national decision-making arrangements and key areas of people's livelihood, select some projects each year for key performance evaluation, and apply the performance evaluation results to budget arrangements, policy adjustments, and improved management. Strengthen financial and accounting supervision and restraint, deepen the special action of financial and accounting supervision, and seriously investigate and punish illegal and irregular behaviors that affect high-quality development. By strengthening incentives and constraints, the large amount of 'real money' in transfer payments is expected to have greater utility, better enhance the enthusiasm and initiative of local development, and promote high-quality economic development He Daixin, Director of the Finance Research Office at the Institute of Financial Strategy, Chinese Academy of Social Sciences, said. (New Society)