Reading guide
From 1998 to now, China has experienced three rounds of positive fiscal policy cycles, including 19982004, the end of 20082012 and 2013 to now, respectively corresponding to three major economic development stages of rapid economic growth, coping with the financial crisis and the superposition of three phases of the new normal. The main contradictions and national strategic objectives of economic development in different periods have different emphases, and the manifestations, final effect and impact of active fiscal policy are also different. At present, China's economy is facing triple pressure. The proactive fiscal policy should improve its efficiency and pay more attention to accuracy and sustainability. It is China's proactive fiscal policy for 13 consecutive years since the international financial crisis.
What are the characteristics of an active fiscal policy? How to judge the enthusiasm of fiscal policy? What changes have taken place in the three rounds of active fiscal policy? Where should the future fiscal policy go? This paper mainly answers the above questions.
Abstract
I. overall comparison of three rounds of active fiscal policies since 1998
The first round of active fiscal policy from 1998 to 2004 focused on expenditure expansion, expanded total demand through infrastructure, hedged the impact of the Asian financial crisis and catastrophic floods, and stabilized the overall economic and social situation.
From the end of 2008 to 2012, the active fiscal policy lasted the shortest and had the strongest direct stimulation effect on the economy. Through joint efforts on the expenditure side and income side, it mainly used structural tax cuts and fee reductions and infrastructure to drive 4 trillion investment to stabilize the economy, but it also led to the rapid expansion of local implicit debt and other problems.
The third round of active fiscal policy implemented since 2013 has lasted the longest, and the macro environment is the superposition of three phases, the new normal and the new era. In addition to the total effect of stable growth, the implementation goal focuses on promoting structural reform, optimizing the business environment and preventing and resolving risks. The income side has changed from structural tax reduction and fee reduction to comprehensive tax reduction and fee reduction, and the expenditure side has gradually shifted from infrastructure construction to people's livelihood.
II. Five characteristics of active fiscal policy
First, the positive fiscal policy measures are usually expansionary fiscal policies, and the degree of positive fiscal policy should be comprehensively judged. To judge the positive degree of fiscal policy, we should not only look at the deficit ratio and deficit scale, but also see whether it meets the needs of the economic and social situation, whether the financial overall planning ability is improved, whether the expenditure direction is optimized, and whether the expenditure efficiency and performance are improved. The official deficit ratio, the actual deficit ratio, the generalized deficit ratio and the growth gap of general public budget revenue and expenditure provide a window to observe the enthusiasm of fiscal policy. In terms of deficit ratio, the official deficit ratio plays a more important role in transmitting policy signals.
Second, an active fiscal policy usually needs to hedge the downward pressure on the economy and provide support for steady growth. At present, the active fiscal policy has changed from focusing on short-term countercyclical regulation to taking into account short-term, medium and long-term development goals and achieving a balance between multiple goals. The first two rounds of active fiscal policy, as an important means of macro-control and a basic tool for performing government functions, mainly through the cooperation with monetary policy to resist the economic downside risks caused by the financial crisis in 1998 and 2008 and achieve the goal of high-speed economic growth. In the stage of high-quality economic development, active fiscal policy stands at the height of national governance. It should not only play the role of counter cyclical regulation and steady growth in the short term, but also take into account the quality and benefits of medium and long-term economic growth, achieve the balance between steady growth and risk prevention, development and security, and achieve the balance between current and long-term, short-term economic and social stability and long-term economic endogenous growth capacity.
Third, the proactive fiscal policy has shifted from infrastructure expenditure to revenue side, from relying on government expenditure to relying on stimulating the vitality of market players, effectively reducing the burden on residents and enterprises through comprehensive tax cuts and fees, and releasing water for fish farming. The first two rounds (especially the second round) of active fiscal policy mainly through the issuance of long-term construction bonds and infrastructure. The policy has strong strength and obvious stimulating effect on the economy. The growth rate of infrastructure investment has maintained double-digit growth for a long time before 2013. A lot of negative impacts on the local economy, such as excessive investment in infrastructure, can not be ignored. The third round of active fiscal policy implemented in 2013 paid more attention to the revenue side, continued to promote tax legislation, continuously improved tax system arrangements, promoted key institutional tax cuts and fees in the fields of value-added tax, personal income tax and social security, and significantly reduced the macro tax burden.
Fourth, in the face of increasingly tense revenue and expenditure contradictions, fiscal expenditure has changed from extensive management to careful calculation to live a "tight life", from infrastructure to people's livelihood, and from "railway and public machinery" to new infrastructure, so as to improve expenditure efficiency and promote economic transformation.
Fifth, the proactive fiscal policy has shifted from blind expansion of debt to regulating the government's debt financing mechanism to prevent and resolve debt risks. After the strong stimulus policy from the end of 2008 to 2012, the local implicit debt increased rapidly, which partly reflects the irrationality of the combination of fiscal policy arrangement and local fiscal operation mechanism. Since 2015, local governments have been allowed to issue general bonds and special bonds, adopt quota management measures, actively resolve the risk of stock implicit debt, and continuously improve the government debt financing mechanism.
III. Where will the proactive fiscal policy go in the future?
In the short term, the proactive fiscal policy should increase revenue and reduce expenditure and solve the contradiction between fiscal revenue and expenditure. In the medium and long term, we should solve the problem of financial sustainability through institutional and mechanism reform to avoid falling into a financial crisis. From a longer-term perspective, active finance must stand at the height of national governance and national strategy rather than from the perspective of Mr. accountant. We should build a new financial and tax system from the perspective of population aging, changes in industrial structure, solving the contradiction of income inequality and imbalance, high-quality development, accelerating the construction of a new development pattern, promoting the construction of a powerful country in science and technology, and fully mobilizing the enthusiasm of the central and local governments, entrepreneurs and scientists.
Risk tip: the effect of steady growth policy is less than expected, and the resolution of implicit debt is more than expected
