The Comparison And Empirical Study Of China's Debt Space

At the end of 2008,to cope with the downward pressure on China's economic growth caused by the international financial crisis,government implemented a proactive fiscal policy with a broad range of tax cuts and expenditures increase.After fulfilling the task of stimulating economic recovery,China has continued to implement the proactive fiscal policy to further realize the adjustment of China's economic structure and transform the mode of economic development.Obviously,this policy has made an important contribution to the sustainable growth of China's economy,but at the same time,it has hidden trouble for our fiscal sustainability.As is known to all,the implementation of active fiscal policy needs a lot of issuing bonds and local debt financing to support.Thus the potential space of the active fiscal policy is decided by the space of the national debt.in this context,The exploration of China's debt space has practical significance.Based on that logic,This paper analyzes the debt space of China's central government debt,public debt and real government debt from the following aspects.First of all,Through static analysis and dynamic analysis,this paper makes a comparative study on China's national debt index.The static analysis is includes examining and comparing the absolute scale of the national bonds and the relative scale reflected by the rate of dependency,bearing rate and debt paying sate of national debt and the rate of deficit.The dynamic analysis refers to the analysis of the growth path of national debt,and revise the cordon standard of our country by dynamic model.Secondly,in the international comparison of the scale of national debt,we found that the fiscal focus of our government was mainly on the construction of finance in the past years,while the performance of the public function of finance was not enough.Since the performance of this part of the functions will inevitably aggravate the financial burden of government,ignoring the performance of this function will result to underestimate the scale of our national debt in the international comparison.To make up for the missing part of the debt finance in our country public functions of estimates,we determines the major areas of financial publicity function lack in our country through the comparison of fiscal expenditure structure,and according to some international minimum standards,we reckon the missing parts of national debt.By comparing the offset public debt,we found that the level of public indebtedness of our country is still lower than most developed countries,so the expansion of the national debt scale in our country still has a certain space,which can support the further active fiscal policy.Finally,this paper fit the fiscal response function of our country and judge the debt space in China according to the analysis framework of Ghosh(2013).We have concluded that China's real government debt-to-GDP ratios ceiling is 59.6%in 2015,and the real government debt-to-GDP ratios is 46.6%in that year,so we have a debt space of 13 percentage points.Furthermore,we use the fiscal response function to simulate the economic trends in the future under the potential extreme circumstances,and concluded that economic growth rate,the Marketization of interest rate and the residents savings releasing has the important influence to government debt.The decline of economic growth rate and interest rate liberalization will lead to the reduction of interest rate,which will result to the collapse of the upper limit of China's debt burden,and make government debt unsustainable.In addition,the decline of the household saving rate can significantly reduce the debt burden of our country,while the impact on the debt burden limit is slight.