China's National People's Congress (npc) Budget Review Supervision And Budget System Innovation

With the spread of the theory of public finance, the voice of fiscal democratization and rule bylaw is getting higher and higher in China since2000. The budget, as a better way of nationalgovernance, has got more and more attention. Many scholars have proposed that the establishmentof a modern budget system should become the key themes of building a socialist democracy andlegal system. China’s National People’s Congress is the highest organ of state power and the mostimportant participants in the budget system.That it should play what role and how to play a role inthe establishment of a modern budget system, has become a key issue urgently need to answer notonly in the construction of a modern budget system, but also in the construction of socialistdemocratic system.This paper tries to investigate the restriction, power and path of the budgetsystem reform in China from the perspective of upholding and improving the people’s congresssystem.This research based on China’s national conditions and practice and kept the Marxist politicaleconomy as the guideline. The research also used the tools and methods of the new institutionaleconomics. It combined with the historical analysis, institutional change and case studies to reviewthe control on the budget by the National People’s Congress since1949and discuss a number ofissues in the National People’s Congress legislative, examination and supervision on budget andtaxation. These issues were involved the construction and development of the budget system. Theyincluded: the modification of the Budget Law, the Enabling Act of tax legislation, the mandatoryexpenses in budget, the management of the balance of government bonds, the control on thesurplus revenue and the budget stability and regulating system, the full-scope budget managementand the dual budget system in China. It could be seem that the National People’s Congress hadplayed an active role in the construction of a modern budget system and achieved significantresults in the past decade. It also need to be seem that there are many problems which is notresolved yet. These problems showed that some fundamental relationships have not beenstraightened out in the Chinese budget system, in particular in the legislation and control system ofthe budget. There has a long way to go to establish a modern budget system in China.Through the analysis, the paper pointed out that the National People’s Congress legislation,examination and supervision on the nation budget promotes the construction of a modern budgetsystem which is the foundation of the socialist market economy and socialist democratic politics. Considering the history and circumstances in China, the construction of a modern budget systemshould be a step-by-step transformation process, which drived by problem-breakings and usingincremental reforms to promote stock reforms. The establishment of a modern budget systemneeds the National People’s Congress to play indispensable and important roles in public fianance,such as fiscal and taxation legislations, becoming a public decision-making platform, a supervisoron government and the mechanism to balance the powers.To complete these functions, it shouldnot base on the competition and counterwork between the legislature and the executive body, butrely on mutual cooperation and institutional innovation to achieve a win-win situation. The first ofall should be the reform and innovation of the budget control system of the National People’sCongress.The paper suggested that strengthening the budget examination and supervision capacity,seeking win-win reforms, and promoting institutional innovation constantly, should be three waysto improve the budget control system of the National People’s Congress. These ways are also veryuseful in the establishment of a modern budget system and improving the socialist democracy andlegal system. In order to promote the reform of the budget system, these issues should be focusedon currently which inlude the reforms of the taxation legislation, improving the transparency ofthe budget, improving the process and mechanism of budget examination and supervision,strengthening the researchs on fiscal and tax issues, encouraging public participation.