Exploration of China's Fiscal System Reform

Author: Zou Jichu
Publisher:
Publish Date: 2003-05-01
Features: This book is an academic monograph by Professor Zou Jichu, the Director of the Department of Economics at Feng Chia University in Taiwan. He has shown great concern for the ongoing economic reforms in mainland China and has conducted systematic and comprehensive research on fiscal reforms in China. This book is based on his years of research. It primarily explores the reform of China's fiscal system from the perspective of institutional transition theory, systematically examining institutional transformation issues at various levels, including fiscal structure, planned prices and fiscal revenue and expenditure, central-local fiscal division, regional economic development and conflict, and the reform of state-owned enterprises. Readers can gain insights into the new research perspectives and depth of Taiwanese scholars on China's economic reforms, particularly in the fiscal field. This undoubtedly will deepen academic research exchanges between scholars from both sides of the strait and allow mainland readers to further understand the research views and developments of Taiwanese scholars. This monograph, Exploring the Reform of China's Fiscal System, is authored by Professor Zou Jichu of the Department of Economics at Feng Chia University, in collaboration with Professor Hu Yijian of Shanghai University of Finance and Economics. At the outset of the research project, Professor Hu invited Professor Yan Shuhai of Shanghai University of Finance and Economics, Professor Xu Riqing of the Economic Research Institute at Shanghai Academy of Social Sciences, Dr. Dong Qinfa of the Finance and Taxation Bureau of Shanghai Pudong New Area, and Professor Ge Weixi of Shanghai University of Finance and Economics. They provided valuable suggestions on the research outline and direction. After the initial draft was completed, Professor Hu arranged for Professor Ma Guoxian, Professor Yang Junchang, and Professor Hu Yijian to conduct a detailed review and offer valuable comments. Additionally, Professor Lu Minren, Professor Hou Jiaju, and Professor Chen De'an reviewed the draft, and their opinions were highly helpful in revising and refining the initial draft. On behalf of the research project, I extend my sincere gratitude to them. The focus of this book is to explore the reform of China's fiscal system in mainland China from the perspective of institutional transition theory, which attempts to analyze the transformation of China's fiscal system by examining the shift from the current system to another. Reform is undoubtedly the main axis of this transformation. According to institutional transition theory, this book systematically examines institutional transformation issues at various levels, including fiscal structure, planned prices and fiscal revenue and expenditure, central-local fiscal division, regional economic development and conflict, and the reform of state-owned enterprises. When discussing the interactive relationship between mainland China's economic reforms and the evolution of the tax system, this book not only analyzes the impact of economic reforms on the fiscal system and the transformations that must be addressed but also explores the implications of the direction and speed of fiscal system reforms for long-term economic growth. This book concisely points out that the 1994 fiscal system reform still maintained the revenue sources of local governments. The fiscal responsibility system in the 1980s, due to the lack of fiscal discipline in local governments and the inadequate economic and fiscal regulations, led to numerous problems. The central government must ensure that the national economic market is not affected by local protectionism to provide national public finance, allowing free circulation of goods and production factors, and to establish hard budget constraints for local governments and limits on intergovernmental fiscal transfers. Additionally, the reform of state-owned enterprises has a crucial impact on fiscal soundness. In other words, to strengthen fiscal soundness, enhancing the reform of state-owned enterprises is an important approach.