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商管 1202班
第三组朱静、陈家宝、佘晓璇、胡亚旻、徐慧莹
--since reforming and opening up
Content
Introduction to Fiscal Policy -- Ring
Development History of China’s Fiscal Policy:
1979~1982 -- Kalbee
1988~1993 -- Jane
1998~2004 -- Perilla
2008~2010 -- Serene
Conclusion -- Ring
Introduction to Fiscal Policy
Definition:
principles set in favor of political, economic and social development to guide the fiscal tasks in a certain period.
Ultimate purpose:
to balance the total demand and requirement of society through financial expenditure and tax policy.
Fiscal Policy in China
An important tool for government’s macro-control.
Include taxation, subsidies( 补贴 ), deficit( 赤字 ), national debt, etc
To maintain efficient allocation of the public resources, equal distribution of the social wealth & steady development of the national economy.
Development History of China’s Fiscal Policy
--since reform and opening up
-- Kalbee
Overheating Economy
Financial deficit
InflationForeign trade
deficit increased
Background
Eight-Character Policy
1.Adjust the structure of imports and exports, balance the international payment.
2.Reform the financial system, “serving meals to different diners from different pots” ,promote the fiscal balance at all levels.
3.Rectify: reduce the expenditure, control the demand of invest-ment and consumption, stabilize the market, control the prices.
4.Improve the supply capacity of consumer goods by increasing the investment on agriculture and light industry.
Effect
After the macro-control, the expectant goal of fiscal balance, price stablity and credit balance was basically achieved.
However, there are so much austerity policies in the economic adjustment that the economic growth rate was decreased from 7.8% in 1980 to 5.2% in 1981.
Background :The national economy declined
【 Effect 】
The gross domestic product (GDP) growth rate gradually picked up to 9.1%, which are 3.9% higher than last year and quickened to 10.9% in 1983.
Loose Fiscal Policy and M onetary Policy (1982)
1. ease monetary, deepen reform of the financial system; 2. replacement of enterprise profit by tax; 3. increase effective supply.
-- Jane
Background
Overheating economy in late 1984:
Expanding differences between social aggregate demand and aggregate supply
Rapidly increasing investment and consumption
Sharply increasing general price level
Government continuously enlarged financial deficit
Banks excessively issued currency
Severe inflation in 1988:1.Retail price of commodities increased by 18.5%
2.Consumer price increased by 18.8%
“Govern economic environment, rectify
economic order and comprehensively
deepen reform ” in 1988:
Reducing the scale of investment in fixed assets
Having strong control of consumption demand
Tightening central fiscal expenditure
Conducting taxes reform
Effects
The prices quickly backed to normal level.
The demand expansions were addressed.
The unreasonable industrial structures were changed.
Companies failed to remain manufacture.
The resident incomes decreased.
Background
Deng Xiaoping’s southern tour
Fourteen CPC National Congress
A new round of economic construction:
Social fixed investment 61.8%
Retail price 13.2%
Consumer price 14.7%
Moderately Tight Fiscal Policy
“Deepen the reform, strengthen
and improve macro-control”:
Reform the fiscal system.
Standardize the relations of distribution
among the government and enterprises.
Conduct a large scale of tax reform.
Have a positive effect on the economy.
-- Perilla
Background
1.The financial crisis in Southeast Asia caused
significantly slow economic growth and deflation (通货紧缩) .
2. The market-oriented reform (市场化改革) surplus economy (过剩经济) 3. The strategic reorganization of state-owned enterprises
(国有企业战略重组) laid-off workers and stress of unemployment
4. Monetary policy
Proactive Fiscal Policy
1. Issue additional long-term treasury bonds & strengthen the infrastructure investment.
2. Adjust the tax policy, support exports, attract foreign investment and lighten the burden on the enterprises.
3. Increase government spending
4. Increase wages, reform the distribution system(分配制度) and give households more spending power.
5.Start a wide range of state-owned enterprises bankruptcy
6.“The change of debts into shares” (“债转股”)
Effects
1. made remarkable achievements
2. the Asian financial crisis Macro economic operation
3. the continuous rapid increase of the national economy
Background
The investment demand expansion appeared in the operation of the economy
The increasing inflation pressures
under-investment of small and medium-sized enterprises and service industry
Prudent Fiscal Policy
Reduced national bonds scale (国债规模) Reduced the construction project.
Carried out structural adjustments under moderate control
Deepened the reform of the tax system
Reformed the resource tax and consumption tax
Reformed the export tax rebate system actively
(出口退税机制改革)
Effects
The price level stability & inflation expectations
The problems among the three major industries nearly solved
The relationship between investment and consumption be congruent
-- Serene
In 2008 , The global Financial Crisis broke out
Background
the speed of economic
development in China slowed down
*result:
1. property investment , foreign investment, purchase of vehicles decreased;
2. unemployment rate increased
· Several methods:
Promote agricultural development, adjust economic structure ,deepen reform, maintain social stability, etc.
· Plans :
1.Ten key Industrial Revitalization Plan 十大重点产业重振计划2. Regional Industrial Upgrading Investment Stimulus Plan 地区性的产业升级投资刺激计划
Proactive / Steady Fiscal Policy
( 积极财政政策)
Effect:
1. Hindered 遏制 the economy rapid decline 2. Stabled the confidence of investors &consumers 3. Stimulated the marketing economy in China
In 2010, the GDP of China overcame that of Japan
Background
China had become the world’s 2nd largest economic entity
*Problems:
1. the gap between the rich& poor still exists, and it’s getting more serious.
2. per capita GDP , the quality of life are still low.
3. the industrial structure in China need to keep pace with the western countries…
1. Adjust productive structure, economic growth basing on structure optimization, regional coordinated development.
2. Expand domestic demand, particularly consumer demand.
3. Guarantee the people‘s livelihood, create more job opportunities.
4. Deepen the reform of the fiscal and taxation, strengthen the intrinsic motivation of the economic development. 5. Strengthen fiscal management ,improve financial performance.
Continue the Proactive Fiscal Policy
( 继续实行积极财政政策)
Effect : 1. Maintain steady and rapid economic growth.
2. Keep a harmonious & stable atmosphere
in society.
3. Maybe our GDP could overcome America
in 20 years.
Please ENJOY VIDEOS to FIND ANSWERS O(∩_∩)O~
Q : ARE you really sure the definition of fiscal policies?
DO you know what kind of fiscal policy did China take after 2010?
Think & Reflect
VIDEO1: CHINA’S FISCAL & MONETARY POLICY REVIEWS
http://english.cntv.cn/program/bizasia/20111213/109683.shtml
VIDEO2: Introduction of fiscal policy roles in China
http://english.cntv.cn/program/newshour/20111212/114902.shtml
VIDEO3: Chinese fiscal policy in the future
http://english.cntv.cn/program/bizasia/20101213/106600.shtml
Conclusion
Different periods, different fiscal policies
Main progress:
1.more equal
2.more flexible
3.more normative
In a word, all the efforts are made for
the interests of the public.
Thank you very much
for your attention!