China's Fiscal Expenditure Structure And Economic Growth Relationship Study

In a market economy, the market and the Government two systems distribute the social resources, market relations supply and demand through pricing and resource allocation, and the Government uses the public sector receipts and disbursements to the achievement of resource allocation in order to promote economic growth. This paper, at the view of Chinese fiscal expenditure structure, analyzes the relationship of financial expenditure structure and the economic growth, using 1978 to 2006 data. In the Chinese Statistical Yearbook,fiscal expenditure is distinguished into five specific projects:Expenditure for Economic Construction,Expenditure for Culture and Education,Expenditure for National Defense,Expenditure for Government Administration and Other Expenditure. And the Production Expenditure includes Expenditure for economic construction,Expenditure for culture and education includes,the Consumption Expenditure includes Expenditure for national defense,Expenditure for Government Administration and Other Expenditure. Through the econometric analysis, I find out:the best percentage of Chinese production expenditure and consumption expenditure is 20.76% and 18.16%, Chinese fiscal expenditure is obviously inadequate; the marginal production of production expenditure and consumption expenditure are both greater than 1, attesting that the production expenditure and the consumption expenditure can drive the economic growth.