Horizontal Fiscal Balance Between Provinces In Our Country Under The Theoretical Framework Counterpart Support Research

Counterpart support among provinces is a special method used in the field of disaster relief, poverty reduction and development of some regions and industries. There is a close relationship between the counterpart support and China’s fiscal system reform. The theory of horizontal fiscal equity can be applied to explain counterpart support. This paper summarizes counterpart support’s background and its sources of funding, and concludes that the objective of counterpart support was gradually changed. Counterpart support has the nature of horizontal fiscal transfer payment, however, it enlarges the financial gap among regions and it has no obvious effect on regional economic convergence. Counterpart support should become a formal horizontal transfer payment, and the vertical transfer payment also needs to be optimized, and then the goal of horizontal fiscal equity can be really achieved.