China's Fiscal Policies in the Past Seven Decades: Characteristics by Stage, Experience and Prospects
- YANG Zhiyong
- National Academy of Economic Strategy, Cass, 100028.
The paper combs through the fiscal policies adopted by China in the past 70 years, summarizes their characteristics in different stages and experience, and looks into the future fiscal policy options for China. The fiscal policy history since the founding of the People's Republic of China can be divided into four stages. Stage 1: 1949-1952, the market-oriented fiscal policy aimed to restore the national economy; Stage 2: 1953-1978, the planned fiscal policy; Stage 3: 1978-2012, the fiscal policy accommodating the needs of economic transformation; and Stage 4: 2012-present, the fiscal policy accommodating the needs of the new era. A look at the above fiscal policy history draws the following conclusions: 1.The goal of the fiscal policy should be set based on a correct understanding of the role of the state; 2.For the fiscal policy to work, it must respect the fiscal rules; 3.The fiscal policy must aim higher than the goal of macroeconomic stability and provide guarantees for industrialization and modernization; 4.The government should understand fiscal deficits while proactively guarding against fiscal risks; 5.The implementation of the fiscal policy must go hand in hand with the fiscal reform; 6.The funding for the fiscal policy must come from diverse sources; 7.The choice of a fiscal policy should fully consider external impacts. The future fiscal policy should revolve around serving state governance and its modernization, and serving China's contribution to the community of shared future for mankind. We should update our knowledge on the fiscal policy to support the decision-making for the choice of fiscal policy. The goal of fiscal policy should be set in coordination with that of other policies. Moreover, from the perspective of the government's disposable revenue and cash flow, the paper probes into the space and challenges for future fiscal policy and sorts the problems of the transmission mechanism that might prevent the fiscal policy from working.
- Fiscal Policy, China's Public Finance, Fisical Reform, Macroeconomic Regulation