The Empiircal Analysis Of The Impact Of Fiscal Policy On Industrial Structure In China

After2010, China’s economy began to decline, and in2014the growth rate isdown to7.4%. Increasing downward pressure is being put on the economy, so it isimportant to adjust the industrial structure. Fiscal policy as an important means ofnational macro-control tool should play a more important role in the adjustment ofindustrial structure. This paper use SVAR model to study the impact of the fiscalpolicy on the industrial structure.The study of the impact of government spending on the industrial structureindicated that the impact of government spending on industry structure has twocharacteristics: government spending, both the central government and localgovernment spending, are conducive to reducing the value of the primary industry inthe proportion of GDP,and increasing the second and third industrial output in theproportion of GDP, the reason is that increasing investment in infrastructure andeducation benefits for the development of secondary and tertiary industries,and thespending create a good investment environment so that the rate of the marginalreturns of the secondary and tertiary industries are much higher than the primaryindustry, so the employees will bear bigger opportunity cost in engaging the firstindustry; while increasing education spending has contributed to the formation ofhigh-quality human capital, the two factors together are the reasons for the formationof the second and tertiary industries demand.The second reason is that governmentspending has created rapid development of China’s private economy conditions. Theprivate economy, especially small and medium enterprises are basicallylabor-intensive industries, which provide a large number of jobs in the supply. in therole of supply and demand mechanism, a large number of agricultural labor flow intothe secondary and tertiary industries, the first industry accounted for the decliningshare of GDP.2. The current government spending is not conducive to improving theindustrial structure sophistication, the reason is that the government spending on state-owned enterprises as the mainstay of the industry strengthened its monopolyposition, causing distortions in resource allocation. Our country is labor-intensive andcapital-scarce, and a large amount of spending by the government flow into thecapital-intensive industry, and this is contrary to the comparative advantage theorem.In terms of tax impact on the industrial structure, the impact of tax on industrystructure has two characteristics: Firstly, the impact of turnover tax on industrystructure is obvious; secondly, the impact of income tax on the industrial structure isnot obvious.Then we can serve policy recommendations:1. In the future government shouldb spend more money on education and the comparative industry.2. In the future taxpolicy should increase the income tax rate and reduce turnover tax rate.