From "Decentralization of Power and Transfer of Profits" to "Public Finance"——Three Decades’ Historical Process of China Financial and Tax Reform

Abstract

The fiscal and tax system reform in China has roughly undergone four stages which are both independent and interrelated with each other. One is from reform which concentrates on paving way for whole reform and takes the decentralization of power and transfer of profits as fundamental tone to fiscal and tax reform in 1994 which intends to take road to systematic innovation and establish a new fiscal and tax system and its operating mechanism. The second is from one-way policy of government’s revenue and expenditure and tax revenue within system to interaction of these two aspects both within and outside system. The third is from tax reform which standardizes government’s behavior of revenue and expenditure and its mechanism, and management system reform of financial expenditure to establishment of whole fiscal and tax reform and development goal. The last is from building fundamental frame of public finance to further improving public financial structure and system.