Research On The Fiscal Sustainability Of Western Region

At present,China’s economy has entered a new normal stage of declining growth.In addition to the outbreak of COVID-19,economic development and all aspects of society have suffered a major blow.Facing the severe international situation,uncertainty has increased.In this case,finance,as the foundation and major pillar of national governance,plays an important role in mediation.However,with the increasing contradiction between fiscal revenues and expenditures and rigid growth of expenditure,the problems faced by finance are more complex,and the issue of fiscal sustainability cannot be ignored.At present,the implementation of active fiscal policies,together with the implementation of the policy of reducing fees and taxes,has drawn much attention to the issue of local fiscal sustainability.The problems of slower development,imbalance and inadequacy still exist in the western region,which on the other hand shows that the development of the western region has great potential to improve the national average development level,so the financial sustainability of the western region deserves attention.This paper analyzes the financial sustainable development in western China by combining theoretical research with empirical research.First,it combs the domestic and foreign research literature on fiscal sustainability,and explains the concept of fiscal sustainability,intertemporal budget constraint theory,and fiscal decentralization theory.On this basis,it analyzes the theory of the impact of economic growth and transfer payment on the sustainable development of finance.Secondly,it analyzes the current situation of financial sustainable development in the western region,using data such as general public budget revenue and expenditure,deficit ratio and local debt balance to explain,and finds that the growth rate of financial revenue in the western region has declined,the rigidity of expenditure has increased,and the stock of debt balance is large.In order to further judge the degree of financial sustainable development in the western region,the intertemporal budget constraint model is used to analyze from the provincial and prefecture level city dimensions,and it is found that the degree of financial sustainable development in the western region is weak from the provincial and municipal perspectives.On this basis,the paper analyzes the influencing factors of the sustainability of the western region,mainly examines the impact of economic growth and transfer payment on the financial sustainability of the western region,and finds that economic growth has a significant role in promoting financial sustainability,while transfer payment has a hindering role in the development of financial sustainability.Finally,based on the research,policy recommendations are put forward.