Has Fiscal Federalism Worked for Macroeconomic Purposes? The Chinese Experience 1994–2003

Liping He1
1Department of Finance, School of Economics and Public Administration, Beijing Normal University, Beijing, China

Tóm tắt

China’s central government undertook a major tax regime reform in 1994 that was characterized by fiscal federalism. In hindsight, it may be seen to be more emphatic on the revenue side than on the expenditure side. It has achieved a certain success both for revenue shifting and inflation-fighting purposes. However, the reform and its subsequent follow-ups have not clearly addressed some fundamental issues in China’s government finance system, such as overhauling the function of government finance and redrawing lines between the center and subnational governments with regard to their fiscal responsibilities and duties. Moreover, movements towards fiscal federalism may have actually increased fiscal burdens on the economy, especially on domestic sectors of the economy. Coupled with enhanced policy support to China’s external development, fiscal federalism may have further helped accelerate resource shifts towards the external sector, thus resulting in an unprecedented rapid expansion in China’s exports since the mid-1990s.

Từ khóa


Tài liệu tham khảo

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