The Summary Account Of Active Fiscal Policy In China

As an important means of national macro-regulation, fiscal policy plays an more and more important effect in modern market economy. The active fiscal policy has been carried out for six years in China. In face of the argument about whether active fiscal policy should continue or fade out among study circle and government circle. The trend of active fiscal policy become an important subject. The author also studies seriously the subject. Through reviewing and concluding the historical background, policy content and implementation character of the enforcement of active fiscal policy, singing high praise of the effect of active fiscal policy, and analyzing the sustain ability of active fiscal policy on the basis of theory and practice, the author draws general conclusions about the basic trend of active fiscal policy.The author regards that active fiscal policy carried out in 1998 is a classical act of government's regulating macro-economy. The reason is that the insufficient demand and slow economic growth appeared in economy in 1998.influenced by Asian financial crisis, the new problems of post -shortage economy which have been existed become apparent. First, the unemployed increases and consumption demand increasesslowly. All bonds of reform carried forward such as medical treatment, housing and education raise the expected expenditure, which cause marginal propensity to save to rise and marginal propensity to consume to decrease. Second, the growth of investment demand is slow, and the economy growth is weak. The insufficient domestic demand an Asia financial crisis shock exert a enlarged effect on process of macro-economy, and deflation appears in China. Under this background, after repeated weighing, the government chose the expansion of government expenditure as the main method of macro-regulation, and carried out active fiscal policy.At one hand, active fiscal policy expands the investment of infrastructure and technological reform through regulating expenditure policy; increases the expanse of social security; enlarges invested science and education; increases the income of low-income people in cities and towns; enlarges the treatment strength of arbitrary fees collected; and reduces the burden of company and society; put forward taxation policy, and decreases the burden of company. On the other hand, active fiscal policy increases the rate of return taxation for export to support export through regulating taxation policy; decreases the customs tariff and broaden the use of foreign capital; abates tax revenue andencourages foreign trader and society to invest; resumes levying interest income tax, and stimulates individual's investment and consumption.The effect has been apparent for six years since the policy was carried out. The concrete manifestation is that active fiscal policy raised the economic growth, improved the infrastructure conditions, promoted the advancement and escalation of industry structure, strengthened the basic status of agriculture development, promoted the reasonable regulation of regional productivity layout, improved the living standards of people.In the process of implementation, active fiscal policy highlighted the combination of compensation policy, the combination of short and long effect, and the coordination of fiscal policy and monetary policy.Having fully confirmed the effect of active fiscal policy, the author advanced some problems in the process of active fiscal policy and the restriction. The first is the contradiction between the expansion of expenditure policy and the restriction of taxation policy. The second is that the choice of investment items' capital source has misunderstanding. The third is that the mistakes appeared in the orientation of national debt funds, and the prominent expression was that salary of governmentfunctionary was increased constantly in face of insufficient social security. Expanding domestic demand should increased the income of farmer, but the strength of active fiscal policy supporting agriculture was limited.Just because...