A Research Of Medium-sized Cities' Fiscal Sustainability In Our Country

Study of fiscal sustainability is an important subject in economic research.In recent years,with the outbreak and fast spread of the financial crisis,many countries have a serious surge in sovereign debt and financial sustainability research has been widely concerned once again.As a connection of big cities and small towns,medium-sized cities are the important carrier of China's future industrialization and urbanization,playing an important role in the overall strategy of modernization.But as the world economic fluctuations and slowed growth in domestic economics because of industrial upgrading,the deficit expansion and rising debt after a new round positive fiscal policy,population structure change and people's livelihood expenditure demand pressures increase,local government debt scale showed increasing trend,medium-sized cities are facing enormous challenges.Therefore,this paper studies the financial sustainability of medium-sized cities in order to enhance the financial situation and promote the comprehensive,coordinated and sustainable development of the economy.This paper begins with the analysis of the current situation of medium-sized cities,and makes a preliminary judgment on their financial sustainability.From the perspective of economic development,China's medium-sized cities relative to the number of cities and the proportion of population,are relatively decline in economic development.From the perspective of fiscal revenue and expenditure,the revenue do not cover the expenditure of medium-sized cities,and the gap has been increasing.The situation of financial sustainability is worrying.From the perspective of debt size,in recent years,the size of the local government's debt has been rapid expanded and municipal government debt is in the highest proportion.To a certain extent it indicates that there is serious debt burden in medium-sized cities,which threaten the long-term financial sustainability.Secondly,based on the theoretical framework of the government's intertemporal budget constraint,this paper analyzes the fiscal revenue and expenditure data of the medium-sized cities in China from 1994 to 2014 through the multi-city panel co-integration measurement method.The empirical results show that there is a long-term co-integration relationship between the fiscal revenue and the fiscal expenditure of the medium-sized cities,and the co-integration coefficient is satisfied.The government's intertemporal budget constraint is satisfied and the finance is sustainable.However,because the co-integration coefficient is less than 1,the finance is only weak sustainable.Then,the paper analyzes the risk factors that affect the financial sustainability of medium-sized cities,and points out that there are two aspects:deep-seated institutional reasons and direct causes.By establishing a multivariate regression model for empirical testing we found that the influence of the pressure of economic growth,unreasonable transfer payment system,the growth of people's livelihood investment and huge local government debt on the balance of fiscal is significant.They are the direct causes of weak sustainability.Finally,summarize the above theoretical analysis and empirical analysis,this paper suggested to reform the financial system,actively develop economy,perfecting the transfer payment,optimize the structure of fiscal revenue and expenditure,prevent debt risk improve budget effectiveness and strengthen the construction of characteristic.