The Central Financial Transfer Payment In China To Research On The Effects Of Regional Economic Growth

Since the1990s, the rapid development of Chinese economy China’s aggregate economic has developed rapidly, and the development gap of regional economy is widening. Many studies on different perspectives on this phenomenon have been done, and a large number of successes theoretical results have been found. However, the trend of the widening gap between China’s regional economic developments has not been significantly curbed, and the development gap between the east regions and western regions has been further expanded in the past ten years. The causes and mechanisms of the problem of economic development in China is still a major issue in front of the theoretical interface.The inter-governmental fiscal transfer payment system has initially been established since the tax system reform from1994in China, it plays an important role in regulating the central and local fiscal relations. Intergovernmental fiscal transfers have a close link with the payments and regional economic development. The impact of China’s current system of transfer payments on regional economic development should be studied.This article bases on the perspective of intergovernmental fiscal transfer payments, analyzes the impact of transfer payments on regional economic growth. We select panel data of all the various provinces of China between1995-2009years, analyze the impact of China’s central government transfer payments on regional economic development, and the assessment of the impact of the economic convergence.This study is base on the studies of home and abroad, selects the data from the1994tax system reform in China, uses the method of combining qualitative analysis with quantitative analysis to prove the impact of transfer payments on economic growth. Through the establishment of the theoretical and empirical models to measure regression analysis, on the one hand, we come to find the role of intergovernmental fiscal transfer payments to regional economic growth; on the other hand, we explore a more standardized and transparent transfer payment allocation method, to enhance inter-governmental fiscal transfer payments in reducing regional economic disparities.This article is divided into five chapters. First, we study the background and the significance of the problem, and we explore the theoretical basis of inter-governmental fiscal transfer payment and the impact on regional economic gap. We introduce the domestic and foreign scholars’studies on the problem. We introduce the relevant literature of the impact of transfer payment on regional economic development, and describe the status of the current fiscal transfer payment system and regional economic development in China.Second, we estimate China’s regional economic convergence, and the results show that the inter-governmental fiscal transfer payment does not play an important role in the promotion of regional economic convergence, but to expand the economic disparities across regions. In the analysis of the impact of financial transfer payment on the promotion of regional economic development, we use GDP growth rate as variable, and we use transfer payments, labor, human capital, investment, inflation, the opening degree of the tax burden as independent variables. The results show that the transfer payments can promote economic growth between the central and western regions, while the influence of transfer payments on economic growth in eastern regions is greater than in central and western regions.Finally, we put forward some suggestions of improving China’s fiscal transfer payment system on the basis of the findings, including:(1) optimize the structure of transfer payments, and expand the proportion of general transfer payments, reduce the proportion of tax rebates;(2) specification of special transfer payments;(3) improve the factor method of transfer payment system;(4) the implementation of the vertical and horizontal of the transfer payment mode;(5) establish supporting measures.