Chinese Administrative Expenses And The Level Of Economic Development Between The Correlation Analysis

China's government expenditure has raised fast in recent year that caused a great social attention, not so many studies reach the areas after the time of reform and opening-up. Most of the researcher focused on the empirical relationships between fiscal expenditures and economic growth with the New Growth Theory. This paper chooses the cost-benefit analyses theoretical based on the process of institution change in China from the year 1953 to 2008 with the view of New Institutional Economics, in order to reveal the internal relationship between china's government expenditure and economic growth.This paper dividend the cost of institution change into three part as new institution supply, former institution compensation, and friction of institution change, and also with five time segmentation of 1953-1978, 1979-1984, 1985-1992, 1993-2005, 2006-now. These dividends construct the basis of empirical analyses and found the huge raise of china's fiscal expenditure has its reasonable explain in china's unique economic institution.The raise of government expenditure is the necessary cost in China's fast economic growth but it will be a potential risk if we consider the premium of institution change as economic growth only, so we need an optimal adjustment in China's government expenditure for future economic development.