The Optimized Choice Of Fiscal Policy In Post-crisis Era

Began in March 2007, the U.S. sub-prime mortgage crisis has evolved into the world's most serious financial crisis since the Great Depression in 1929.The crisis bring the U.S. and even the global economy into the abyss of recession, and thus caused the governments to issue various rescue measures. Due to national efforts, the bailout effect begun revealed, the worst stage of the financial crisis has past, but the global economic recovery remains fragile.In response to the financial crisis, governments in the world have taken a series of extraordinary measures, which have prevented the crisis from spreading in some extent. Despite different national conditions, the strategies behind these specific measures have important inspiration to China, it can learn a lot from it. Overall, there are two main fiscal measures for foreign governments to stimulate the economy, the first is to increase expenditure, and the second is to carry out large-scale tax cuts. In addition, in order to ensure sustainable economic growth, The U.S. government implemented a new energy plan, which has stimulated the enthusiasm of low-carbon economy in the world.The financial crisis made China's economic development problems become more obvious.Over the years, China has been relying on investments and exports, it is lack of endogenous consumption power. And the economy has been developed in internal and external imbalances status for years.with the main feature such as high investment, high savings and low consumption; it is also called the serious imbalance of demand structure. If the country can't resolve the problem effectively, the economic risk will be likely to occur in the future; macroeconomic vulnerabilities will be further exacerbated. In order to cope with the financial crisis and maintain economic developed stable and rapid, China started to implement the active fiscal policy and loose monetary policy from the fourth quarter of 2008.By the end of 2010,4 trillion Yuan will be arranged to expand domestic demand and ensure the economy grow stable. China's economic stimulus package started, it includes the expansion of domestic demand, the revitalization of industry, scientific and technological support, enhance the level of social security and so on.From 2009 to 2010, the new round of active fiscal policy in China includes five points. Firstly, improve the incomes of residents, and promote the consumption demand vigorously. Secondly, increase public investment and make the investment structure perfect. Thirdly, optimize the financial expenditure structure to protect and improve people's livelihood. Fourth, implement tax cuts policies to guide business investment and consumption. Fifth, support technological innovation to promote economic restructuring. With the implementation of active fiscal policies, China achieves the target of 8% in economic growth. It is necessary to maintain growth, to pay great attention to people's livelihood and expand domestic demand structure, all of which continues to be the focus of economic development in 2010.In the process of against the financial crisis, it is pleased to see economic growth, but the structural problems have not been changed, many deep-rooted problems have not been solved fundamentally, Greater policy efforts should be carried out to maintain sustainability and relevance. In post-crisis era, China's active fiscal policy has four main areas. Firstly, to regulate income distribution and stimulate consumer's demand. Under the established scale of wealth, more equal distribution of disposable income will increase greater part of consumption. To narrow the income gap, one should adjust the structure of the initial distribution of national income, Increase the share of labor compensation. On the other hand, adjust the structure of re-distribution and increase disposable income. And the government must impose on the consumer-oriented tendency and use the fiscal policy effectively, make it play a greater role in the economic recovery. Secondly, adjust the industrial structure and change economic growth pattern. Industrial structure's adjustment is the core of economic restructuring. The impact of the financial crisis has prompted China to accelerate the adjustment of industrial structure and the pace of upgrading. Whether it is the 4 trillion economic stimulus program, or the ten industrial restructuring plans, the goal is to guide the healthy development of industry. In post-crisis era, the overall goal of China's industrial restructuring is to save energy and improve economic and social benefits. And the main points are to develop medium and small businesses and the modern service industry. In addition, the level of industrial development should be further improved, on the basis of the level of existing industries, it is necessary to accelerate the construction of resource-saving and environment-friendly society.Also, it is urgent to cope with global climate change and enhance sustainable development. Then, optimize the coordination of fiscal policy and monetary policy. Monetary policy is an integral part of national economic policy as fiscal policy, and its ultimate goals and objectives are consistent with the country's macroeconomic policy. Finance and bank credit are two different channels to allocate the national funds, both of them can supply the total demand and total adjusted, but its role is different, and can not substitute for each other, in order to stabilize the economy running should play the role of good coordination between the two. Finally, we should prevent the financial risk actively. In the process of implementing the active fiscal policy, there are a variety of potential financial risks. The government should start from angles such as optimal fiscal policy measures, strengthen debt management, improve the tax system reform, reduce administrative intervention, and monitor the financial operation, to prevent the occurrence of all kinds financial risks actively.