The Impact Of Fiscal Social Spending To Economic Growth In China

Since the reform and opening up, the Chinese economy has sustained a continuously high rate of annual growth; meanwhile, budgetary expenditure for social uses has expanded year by year. However, compared with the budgetary expenditure for economic uses, the proportion of budgetary expenditure for social uses to the fiscal expenditure total is still low. The reason for this status is manifold; the most fundamental one is that Chinese government has not realized budgetary expenditure for social uses can effect economic growth. In recent years, research on the relationship between budgetary expenditure for social uses and economic growth has become a hot topic. However, due to non-existing of the an all-agreed statistical criteria of budgetary expenditure for social uses and the influence of budgetary expenditure for social uses to economic growth is uncertain, academic circles have still not reached a certain consensus. Based on the existing researches, this paper reviews the change of China's budgetary expenditure for social uses since the reform and opening up, using the IS-LM-BP model and the modern growth theory to sum up the impact path of public expenditure for social uses to economic growth, and elaborates the relationship between the changes of expenditure for social uses and economic growth in China in 1978-2006.According to the above frame, this paper is composed by six chapters. Chapter 1 is an introduction which raises the question; Chapter 2 is a literature review, firstly it defines the concept of the budgetary expenditure for social uses, then reviews the existing researches on how budgetary expenditure for social uses affect economic growth ; Chapter 3 states the changes of budgetary expenditure for social uses in China in 1978-2006,and put forward some problems in budgetary expenditure for social uses in China; Basing on the Keynesian IS-LM-BP model and modern economic growth theory ,Chapter 4 sums up different impact paths between budgetary expenditure for social uses and economic growth; Chapter 5 is an empirical analysis, and it analyses the relationship of the whole budgetary expenditure for social uses to economic growth, and the relationship of the function structure to economic growth; With the conclusion drawn in the previous analysis Chapter 6 proposes some policy proposals on how to improve budgetary expenditure for social uses both in whole and in structure from an economic growth and fiscal expenditure structure optimizing perspective.In the Chapter 3, 4, 5, some conclusions are drawn as follows: first of all, budgetary expenditure for social uses can promote economic growth by influencing human capital, aggregate demand and technological progress. Secondly, in 1978-2006, there is a positive correlation between budgetary expenditure for social uses and economic growth in China. Thirdly, in 1978-2006, budgetary uses on educational and science and technology uses promoted economic growth; however, budgetary uses on other uses may affect economic growth negatively to a certain extent, and budgetary uses on health may affect economic growth indistinctively.