Chinese Money Supply And Basic Public Services Research

Establishing a system that make everyone in our country can have a chance toenjoy basic public services, which we called the equalization of basic public services,is the necessary content of maintaining social security and stability, promoting socialjustice and building a harmonious society, and is one of the basic duties of the moderngovernment. China has clearly put forward that equal access to basic public servicesshould be generally achieved in2020. There is a huge practical significance toestablish such a system, in which fund is the core. The equalization of basic publicservices could not be workable without adequate funding. A significant increaseappears in recent years in the sheer size from financial department and in the level ofbasic public services, with a sustained economic growth, a rapid increase of nationalrevenue and a serious attitude in improving people’s wellbeing of government.However, a pronounced gap still exists compared with the people’s growing demandsand the advanced level of basic public services in developed countries.Firstly, for the lack of scientific and reasonable measures in calculating the actualdemand for funds, each level of governments appears extreme uncertainty andarbitrariness when they are financing. The contradiction is more obvious between thegovernments’ responsibility in financing and the actual capacity to pay, so a financingsystem which can be sustainable development has not formed. Secondly, the scarcityand inefficient use on the funds exist side by side as the available funds and thefinancial resource cannot be fully utilized. As a country of socialism with Chinesecharacteristics, the government has a large number of financial resources besides thetax, such as various national assets, sovereign wealth funds, national social securityfund, housing accumulating fund, land-transferring fees and so on, all of which can bethe source of providing basic public services. But the institution and correlationmechanism which work on coordination and integration of national financialresources have not yet been established in China, which lead to a kind ofnon-uniformed, incomplete and nonstandard government management of income andexpenditure, just emphasizing current management and ignoring the management andallocation of the assets, capital and wealth. The use of a large number of nationalassets and fragment management of funds are both less efficiency. How to deal with such problems? Although much of researches on theequalization of basic public services are done, there are less special, embedded andquantitative researches on asset issues. The core of this paper is the supply anddemand of basic public services fund in China. This paper does a systemic andquantitative analysis on the asset issues of basic public services, does an empiricalstudy on the performance of the supply of money, and use econometric methods suchas ARIMA model to predict future data.Firstly, this paper estimates the demand of China’s basic public services fund in2015-2020according to two methods: one refers to international standards of basicpublic services and the other by the growth of China’s basic public servicesexpenditure. Secondly, use the relationship between GDP and basic public servicesspending, the relationship between the total financial expenditure and basic publicservices spending to predict supply of China’s basic public services fund in2015-2020. Finally, calculates the gap of the supply and demand of China’s basicpublic services according to the predicted results.How to cover the gap? Many documents are confined to the current fiscal and taxsystem. This paper has a broader perspective and stands outside the current fiscal andtax system. It puts forward establishing a financial system and mechanism to integrateand coordinate the various resources mastered by our nation. The feasibility on thefinancing capacity of available funds for basic public services is estimated in thispaper. In this way, the source of potential assets and the capacity covering thefinancing gap are to be evaluated. In addition, some existing problems on theoperating fund would be proposed. For example, the rate of return on investment(ROI) is low and the scale of funds using in the basic public services is small, besidesthat, the evaluation system on the performance of financial fund is inefficient and thecurrent level of budget management is still imperfect and so on.As the old saying, by other’s experience, wise men correct their own. Manydeveloped and several developing countries have gathered much more matureexperience in optimizing the financing allocation of the basic public services. Basedon the experience of their specific operations and optimized allocation on the fund,this paper sums up the reference and enlightenment about investment model, budgetmanagement and auditing of performance on the financial fund to China.At last, this paper proposes a thought covering fund gap in the basic public services from three aspects, which contains establishing a financial system andmechanism to integrate and coordinate the various resources mastered by our nation,promoting the reform of fiscal and tax system in the view of the equalization of basicpublic services and innovating the ways of fund raising.The innovation of this doctoral dissertation may be as the follows: The first oneis the innovation on selection of a subject. The current researches mainly concentratein theory evidence, countermeasures, system reform and so on, lacking some systemic,deep and quantitative analysis on the assts issues. Meanwhile, the core of theequalization of basic public services is fund issues. So, the subject selection of thispaper covers the shortage of the current documents and has a certain innovation value.The second one is the innovation on research method. More qualitative analysis existsin the past documents on the basic public services. This paper is to do some systemic,deep and quantitative analysis on the assts issues through building econometricmodels, using mass data and adopting various prediction methods. The third one is theinnovation on research contents. In current documents, there is less detailedcalculation on the necessary scale of fund in achieving the equalization of basic publicservices and on the subdivision of potential fund supply. Especially, there are littledocuments about fund supply and demand on a purely national level. This papercalculates the gap of the supply and demand of China’s basic public services fundfrom the year2015to2020by econometric methods. The forth one is the innovationon research horizon. Many current documents propose the ways to deal with thesituation by confining to the frame of fiscal and tax system. However, this paper is tosuggest countermeasures in the view of integrating and coordinating the variousresources mastered by our nation with standing outside the current fiscal and taxsystem, which has a certain innovation value.