The paper reviews the fi scal policies adopted by China in the past 70 years, summarizes their characteristics at different stages and looks into the future fiscal policy options for China. The fiscal policy history since the founding of the People’s Republic of China can be divided into four stages. Stage 1: 1949—1952, the market-oriented fiscal policy aiming to restore the national economy; Stage 2: 1953—1978, the planned fiscal policy; Stage 3: 1978—2012, the fi scal policy accommodating the needs of economic transformation; and Stage 4: 2012—present, the fiscal policy accommodating the needs of the new era. A look at the above fiscal policy history draws the following conclusions. (1) The goal of the fiscal policy should be set based on a correct understanding of the role of the state; (2). For the fi scal policy to work, it must respect the fi scal law; (3) The fi scal policy must aim higher than the goal of macroeconomic stability and provide guarantees for industrialization and modernization; (4) The government should understand fiscal deficits while proactively guarding against fiscal risks; (5) The implementation of the fi scal policy must go hand in hand with the fiscalreform; (6) The funding for the fi scal policy must come from diverse sources; (7) The choice of the fi scal policy should fully consider external impacts. The future fi scal policy should revolve around serving the modernization of china’s governance system and capacity, and serving China’s contribution to the building of a community with a shared future for humanity. We should update our knowledge on the fi scal policy to support the decision-making for the choice of fi scal policy. The goal of fi scal policy should be set in coordination with that of other policies. Moreover, from the perspective of the government’s disposable revenue and cash fl ow, the paper probes into the space and challenges for future fi scal policy and sorts the problems of the transmission mechanism that might prevent the fi scal policy from working.
Keywords: fiscal policy, China’s public finance, fiscal reform, macroeconomic regulation
China Finance and Economic Review
Volume 8 Number 4 Winter 2019.P29