The Research On "Provincially Direct Supervision Of County Finance" Reform Of Public Finance System In Shandong Province Shandong Province

The traditional financial system under province has no longer adapted to China’snational conditions, and it has hindered the comprehensive, harmonious and sustainabledevelopment of economic and society of China. It is important for us to find a new way inorder to improve the system. Shandong Province has implemented the reform since2009,and it is the time to inspect the effect. As for the positive effects, we need to sum up theexperience for better results; and for the negative ones, we need to check the problems andsearch for the deep reasons, so we can overcome the obstacles and make the systemperfect.In this paper, we take the reform as its subject, applying to the western fiscaldecentralization theory, modern organization management theory and principal-agenttheory, referencing to literatures, using survey research method and comparison analysis.On the investigation of County Cao, we searched for the good results and positive effectsas well as the shortages and negative influence, and then analyzed the reasons, includingbasic financial guarantee mechanism at the county level being not sound, the division ofpower among different governments being lack of legal basis, the reform of public financesystem and administrative system reform being not synchronized, and the financialtransferring payment system being not perfect, etc. Then we consulted some typical way ofother provinces, and explored the proper path and policy measures for financial systemreform of Shandong province due to its local actual situation. We come to a conclusion thatfirst, the reform should be divided into two stages of implementation-the goal in the nearfuture and the long-dated goal; Secondly, we should pay attention to the financial stabilityof basic government, to promote the development of county economy; Thirdly, Improvethe ability of the provincial public finance regulation. What’s more, we should regulate andperfect the transfer payment system further to balance lateral and longitudinal financialresources. In addition, we need to carry out all kinds of supporting measures to improvethe system efficiency.