Evolution of Shandong's Public Finance since 1949

Abstract

On March 1950, the Government Administrative Council promulgated the "Decision on Unifying the State's Fiscal and Economic Work." Apart from local surcharges, all revenues and expenditures were consolidated in the national budget. This highly centralized fiscal management system of "unified revenues and outlays" transformed the long-term situation of overdispersed management, balanced fiscal revenues and outlays, stabilized market prices, guaranteed the military funds to exterminate remnant enemy forces, and met the need to restore key economic installations. In 1953, following changes to and the abolition of the organs of the Greater Administrative Regions, the state budgetary system changed to a three-tier system involving the center, provinces, municipalities, and counties. Local public finance was under a unified system where above-budget and revenues and savings were retained by the locality for it to disburse. In 1958, fiscal power was decentralized and the fiscal management system was changed to one of "revenues determining outlays, fixed for five years."