Abstract: The Third Plenary Session of the 20th CPC Central Committee proposed the establishment of a mechanism for incentivizing and constraining transfer payments to promote high-quality development. As a social income redistribution mechanism, transfer payment is an important economic governance tool to enhance regional development balance and achieve social equity and justice. The purpose of Western transfer payments is limited to controlling regional polarization, often exposing issues of government financial constraints and reverse incentives. Chinese style transfer payments have the dual goals of balancing regional development and promoting economic growth. They leverage the collaborative functions of the government, market, and society, rooted in the demand orientation of people, finance, and services in the recipient areas, and adopt diverse policy implementation methods to form a composite intergovernmental redistribution mainly in the form of fund allocation and cadre exchange. The 1.5 time distribution of“Party-government leading -- market allocation”between initial distribution and redistribution, and the 2.5 time distribution of“Party-government guidance -- social participation”between redistribution and the third distribution, thus shaping a broad redistribution with distinct Chinese characteristics. The process of summarizing and refining the experience and theory of this“economic problem -- political solution”approach is also a positive attempt to build an independent knowledge system of Chinese economics.

Key words: fiscal policy, Chinese-style transfer payment, primary distribution, redistribution of income, social equality and justice