China's Proactive Fiscal Policy Studies

Any Macroeconomic policy is made according to a certain social economic environment rather than made on an impulse. Therefore, specific economic situations have been taken into account during the formulation of proactive fiscal policy in China, when the authority resorted to the macroeconomic regulations with increasing fiscal expenditures as the major method to respond to Asian financial crisis and deficiency of domestic demand. This leads to effective restraint of deflation and enhancement of domestic demand, keeping the economy consistent growing.The paper, aiming at analyzing the proactive fiscal policy thoroughly and comprehensively, has tried to bring out some views, with the hope to provide some valuable reference for the academic school and practical sectors.There are 4 parts in the whole paper. The first chapter has made a generalization of the proactive fiscal policy, whose backgrounds, theoretical sources, experiences from international practices and basic contents have been introduced to ensure a comprehensive idea about the policy. The second one analyses the effect of the proactive fiscal policy with positive methods. That is, the policy pulls the growth of national economy, increases employment, stimulates the adjustments of the economic reconstruction, and accelerates the process of marketization. The third one focuses on some hot spots in the proactive fiscal policy and a result is given that currently the implementation of proactive fiscal policy hasn't any sign of crowding out effects. There is no room for large-scale tax reduction and the state is free from debt risks. The fourth one discusses the orientation of current proactive fiscal policy, placing emphasizes on effectively stimulating consumption, investment and net exports. Then the paper continues to propose the necessity and the right time why and when the proactive fiscal policy should gradually exit.