Scientific Development Concept: Leading New Thinking in China's Fiscal Policy: China Fiscal Policy Report

Author: Institute of Finance and Trade Economics, Chinese Academy of Social Sciences
Publisher:
Publish Date: 2004-12-01
Features: This book is the annual fiscal policy report of the Institute of Finance and Trade Economics, Chinese Academy of Social Sciences. The report argues that the establishment and implementation of the scientific development concept have not only injected new connotations into China's fiscal policy but also posed unprecedented challenges to its implementation. Given China's national conditions, it is highly necessary to establish a Fiscal Policy Committee: the collection, allocation, and use of fiscal funds are relatively decentralized, making it necessary to create a specialized agency for comprehensive coordination; the lag in fiscal policy decision-making and the transmission chain are unique, requiring comprehensive balance among various departments and between different levels of government; fiscal policy and monetary policy need to be comprehensively balanced, and it is obviously insufficient for the finance department to solely execute and formulate policies; the objective requirements for the scientific and democratic decision-making of policies; and the special needs of policy coordination during the economic transformation period, to avoid various frictions in the tightness and looseness of policies. Experts believe that with the successful experience of the Macroeconomic Regulation and Monetary Policy Committee, the substantial growth of fiscal revenue in recent years, and the established mechanisms for fiscal policy decision-making in market economy countries, it is feasible for China to establish a Fiscal Policy Committee. The report also proposes four alternative options for the setup of the China Fiscal Policy Committee: establishing a Fiscal Policy Department within the Ministry of Finance; appointing experts to form a Fiscal Policy Advisory Committee; establishing a deliberative body under the State Council—the National Fiscal Policy Committee; or merging with the existing Monetary Policy Committee to form a Fiscal and Monetary Policy Committee. Experts from the Chinese Academy of Social Sciences recommend establishing the National Fiscal Policy Committee under the State Council at an appropriate time.