Research On Fiscal Policies Promoting China's Urbanization

Urbanization is a systematic project, which includes political, economic, social, cultural, environmental and other aspects of the project. At present, with the rapid growth of China's economy, there having been a stage of fast development of China's urbanization. A large number of rural population in order to achieve their "happy dream". Have entered the cities and towns to work and live. The vigorous mass promoting of China's urbanization has been not only quietly changing the ecosystem, structure, spatial layout, living environment of urban, but also subliminally leading to a qualitative change of people's lifestyles, consumer behavior, values. Urbanization is the important proposition and developmental tasks with China's economy sustainable and healthy economic development. Most of all, the development of New-type Urbanization is a historical turning point for China's social and economic development.There has always been a transformation of economic growth mode in the process of China's urbanization, which results in keeping profoundly understanding the financial system what financial community concerns. New-fiscal system and its operation mechanism is gradually from a tax-revenue mechanism responsible for government payments and tax-revenue inside system to institutions outside the Government simultaneously, with constantly improving the public finance system and continually giving rise to a transitional pattern which sparks off being from government-leading transition to markets, society for the government's forces to advance during urbanization. China's fiscal and taxation system promoting urbanization process in fact involves a consistent thread, that is, there being continually a progress of approaching and reformation From "non-publicity" to "publicity" of the mechanism of reform of tax systems.With the remarkably history development opportunities and the prominent achievements on account of China's urbanization, there have being many new problems and challenges during social development, for instance, insufficiency of public service supply promoting development of urbanization, irrationality of public expenditures structure, tax policy distorted, imperfection of the transfer payment system, poor of environment which people living, barrier and conflict with multi culture exchanging. The great number of thorny issues can be overcome by means of the political, economic and market instruments or tools, where fiscal policy is an important driving force in the process of urbanization in China. Studied on urbanization from a financial standpoint, fiscal policy is given fully play the positive role in promoting the urbanization process with no doubt of the importance of the theoretical and practical significance.Overseas and domestic research mainly concentrated effects factors and power mechanism of urbanization. With the development of China's urbanization and fiscal institution, we view economics, and public economics, and city economics, and development economics, and so on, as theoretical basis of this paper, using mathematical analysis and econometrical model for quantitative analysis, in order to achieve a combination of specification analysis and empirical analysis. On the basis of theoretical analysis we discuss public services, fiscal spending, tax, transfers, and other effects of fiscal policy on the process of China's urbanization, mitigating problems in urbanization and making for new features in urbanization. In addition to, we presented fiscal policy recommendations to promote long-term mechanism of urbanization in these paper. Main content and conclusions of this paper are as follows:(1) The introduction describes the background and significance of this article, with the relevant research literature review and the concepts and theories involved. This dissertation summarizes the research methods, frameworks, priorities, problems and what possible innovative.(2) The second chapter is relevant theory of urbanization in China and its fiscal theory, which introduces the development of urbanization in China: stage, brief characteristics, challenges and problems at the same time. The fundamental theory embodies public service theory, welfare economics, migration theory, theory public service of in employment, and puts forward financial theory in China and its prospects of promoting urbanization.(3) This article demonstrates financial policy's effect on supply of public service in city and town, which briefly introduces existing fiscal system of China public service supply situation. We found the mismatching between economic development and "soft" public service supply of science, education, culture and hygiene in China. We have empirical analysis that financial policy(mainly fiscal federalism) has influence on "hard" public service expenditures and "soft" public service supply.(4) We inquiry the effects of China's urbanization caused by financial expenditures. We tried to build urban economic growth model based endogenous economic growth model. The article provide empirical analysis which demonstrates financial expenditures in the productive public expenditures has effects on urbanization by means of dynamic panel data model(SYS-GMM).Its results found the promotion of the proportion of productive public expenditures are conducive to the development of urbanization, but disadvantageous to rural population flowing into city and town. Improvement of public service expenditures can be effectively beneficial to promote the progress of the process of urbanization, with impeding the individuals' capital accumulation.(5) There are a research that explored how tax policy impact on the process of urbanization, from two aspects. First, the econometric model was found by IV-GMM, in order to get the validation that the main tax had information on urbanization. The result shows that per capita VAT and per capita enterprise income tax has the inhibition the improvement of urbanization level, and per capita land VAT and per capita town construction maintenance tax, conducive to forward development of urbanization. Second, degree of urbanization was indirectly represented by the variable, that is, population migration.Using spatial econometric model is primarily spatial lag model(SLM) and spatial error models(SEM) to verify the main tax impact on urbanization level, with results same to the former.(6) The sixth chapter briefly introduced transfer paid policy producing an effect on the process of urbanization, mainly being from the point of social security. We have used system generalized moments of method(SYS-GMM) on related data for empirical analysis. The research results found, the influence that what social security expenditures did on the process of urbanization is uncertainty, relied on related parameter. Ceteris paribus, the degree of urbanization tendencies of social security expenditures was negative correlation with urbanization.