First, there are serious management loopholes in the distribution of financial funds to various places through "various" (departmental) channels, and a large amount of funds are outside the financial management procedures, with low transparency and serious abuse and loss. In 2005, this part of the funds is estimated to be around 560 billion, and the missing part remains to be investigated. In recent years, the investment in state-owned fixed assets is huge, and the subcontracting of investment projects, divestiture of project funds and graft are serious, resulting in huge losses. Judging from the situation of some projects, the project investment actually obtained by the construction unit is less than one third of the project appropriation.
Second, financial corruption is widespread. A large-scale survey conducted by the Research Bureau of the Central Bank in 2003 shows that it has become a "hidden rule" for formal financial institutions in China to pay extra than the normal interest. On average, the sum of the extra expenses paid by enterprises in addition to the normal interest of each loan and the cost of maintaining a "good lending relationship" with financial institutions is equivalent to 9% of the loan amount. In 2006, the national financial institutions lent 22 trillion yuan; Considering the favorable loan conditions of large enterprises, this rarely happens. According to half of the loan amount, the gray income brought by extra payment to the relevant personnel of financial institutions in China may be as high as 1 trillion yuan. The resulting non-performing loan losses have not been included. The above results have also been verified in some enterprise surveys.
Third, rent-seeking behaviors in administrative licensing and examination and approval, such as local party and government officials' shareholding in coal mines, are mostly obtained through the power of examination and approval, inspection and resource control. Take the pharmaceutical industry as an example. For a period of time, drug approval and circulation were extremely chaotic, which brought huge gray income to some people in the pharmaceutical industry and related power departments. The World Bank's 2006 China 120 Urban Competitiveness Survey pointed out that the entertainment expenses of enterprises can measure the "informal expenditure" of government officials (a euphemism for bribery). The proportion of this expenditure in enterprise sales varies from place to place and enterprises, ranging from 0.7% to 2.3%. If 0.5% is regarded as the normal expenditure level of enterprises and the excess is regarded as the bribe part, according to the national sales income of industry, construction and tertiary industry of 55 trillion yuan in 2006, the travel expenses and entertainment expenses used by enterprises for bribery are about 500 billion yuan. This may only be a small part of bribery, excluding cash, deposits, physical objects, credit card transfers, equity gifts and other bribery methods.
4. Loss of land revenue In 2005, the state-owned land was sold10.63 million hectares, of which only one third was sold by "bidding, auction and hanging". The average difference between "bidding, auction and hanging" and other land prices is 4-5 times, with a difference of more than 5 million yuan per hectare. Except for 0.5 million hectares of affordable housing construction land, the "bidding, auction and hanging" method is not applicable, and the remaining 1.0 1.00 million hectares of land are short of 540 billion yuan. This has become the source of huge profits of real estate developers and gray income of power stakeholders. Land that has not been sold at the price but has entered the market is not included. In addition, in the process of land expropriation and development, it is estimated that the local government will benefit an average of 654.38 million yuan per mu, totaling 208 billion yuan. This part of the land revenue, which should be used to compensate landless farmers and for the long-term development of society, is used as local extra income expenditure in most cases, and its use is seriously lack of supervision.
V. Income from monopoly industries In 2005, there were 8.33 million employees in the industries of electric power, telecommunications, petroleum, finance, insurance, water and electricity supply and tobacco, accounting for less than 8% of the total number of employees in China. However, the total wage and non-wage income is estimated to reach 1.07 trillion yuan, equivalent to 55% of the total wages of employees in that year, which is about 920 billion higher than the national average wage level. A considerable part of it comes from administrative monopoly. There are quantitative items in the above contents, including financial corruption, loss of land income, travel expenses and entertainment expenses used by enterprises for bribery, and gray income of monopoly industries. And the amount is close to 3 trillion yuan, accounting for most of the missing income of 4.4 trillion yuan. This shows that there are huge loopholes and serious institutional defects in China's national income distribution system. At present, the reason for the excessive income distribution gap is not marketization, but corruption and gray income caused by imperfect system. The gray income caused by institutional defects interferes with the normal distribution of national income. In the field of primary distribution, gray income leads to distortion of factor allocation, which leads to low efficiency and affects future economic development. In the field of redistribution, gray income causes the reverse redistribution of national income, and transfers the funds originally used for low-income residents to power stakeholders through improper channels, further widening the income gap and unfair distribution.