Study On Fiscal Risk And Guarding In China

The fiscal risk shouldn't be overlooked during the application of the expansionary fiscal policy . Despite the controversy on whether the fiscal risk exists in China, the author holds the view that fiscal has always been a focus issue during the development of China's economy in the past. So far a multitude of fiscal problems have arisen and accumulated in China. As a result, positive fiscal policy has been carried out recently by expanding the governmental expenditure in an effort to smooth away the fiscal difficulties, keep the steady and rapid improvement of economy and ensure the smooth process of our reform.All the measures taken have proved to be workable. However, some unavoidable side effects were also brought about by the expanding fiscal policy. For example, the central government has been heavily burdened considering the relatively weak economic foundation of our country and the low centralization of our fiscal. For all the reasons above, the author proposes that enough attention be paid to the precautions against the fiscal risk and eradicate all possible risky factors that may lead to a fiscal crisis and this thesis dwells upon the fiscal risk in four chapters. Chapter One Theory on public risk and fiscal risk. This chapter includes four sections: 1. the connotation of risk; 2. theory of public risk; 3. fiscal and public risk; 4. the definition of fiscal risk. The author argues that risk is a kind of social phenomenon as well as a natural phenomenon and human beings are confronted with risks both from nature and from social and economic fields. From the developing history of modern society, we can see that risk from social and economic fields has been a major threat to the existence of human beings. Fiscal's role as the main public risk undertaker is determined by its own nature and characteristics. With the development of modern society, nowadays ,the public risk shows an expanding tendency, and the function of fiscal is all the more needed. A deeper understanding of fiscal risk can be gained by analyzing the important position of fiscal system and macro-economic policy in our country.Chapter Two A analysis of the current fiscal risk in our country .This chapter includes two section: 1. the controversy on fiscal risk in the theoretical circle of our country; 2. the main embodiment of fiscal risk in our country, including the deficit risk, debt risk, fiscal-manipulating risk and international economy risk. Based on the argument on fiscal risk among some scholars in our country, the author summarizes two schools of opinions(i.e. Pessimistic theory and Optimistic theory) and draws the conclusion that there does exist the inevitable fiscal risk in our country and such a fiscal risk calls for the immediate attention instead of an ambiguous opinion.Chapter Three Analysis on the main reasons that contributes to the fiscal risk in our country. The author probes the problem from six aspects: 1. the historical background for the fiscal difficulties; 2. the lagging transfer of the revenue increasing mechanism; 3. the rigidity of fiscal expenditure; 4. the problems transferred from the state-owned banks; 5. pressure from the manipulation of anti-economic cycle; 6. causes of the local debt risk. It is argued in the chapter that many factors contribute to the fiscal risk in our country. Among them are historical factor(which shows that fiscal difficulties exist every year in our country and are the result of reform in each historical stage); fiscal system factor (which means that the current fiscal system in our country is not so perfect); pressure factor(from how to tackle and remove the bad effect brought about by the fiscal policy and how to boost economic development ); the transferred problems from the state-owned commercial problems from the state-owned commercial banks(which is an inseperable factor connected with fiscal risk );and problems of local debt. Chapter Four Main suggestion and countermeasures for guarding the fiscal risk in our country. They are as follows: 1. to borrow good...