Fiscal policy is a long-term and short-term fiscal strategy to achieve certain macroeconomic goals such as economic and social development through taxation and public expenditure, and it is an important means for the government to regulate the economy. According to the role of fiscal policy in regulating the total national economy, fiscal policy can be divided into expansionary policy, contractive policy and neutral policy.
What kind of fiscal policy a country should implement at a certain stage of economic development depends on the macroeconomic operation. Macro-economy operates in various ways, but it can be summarized into three types. One is that the total social supply is greater than the total social demand, that is, "deflation", which is manifested in the decline of the overall price level. In response to deflation, expansionary fiscal policy and expansionary monetary policy should be adopted. The second is that the total social supply is less than the total social demand, that is, "inflation", which is manifested in rising prices. In this case, we should adopt a tight fiscal policy and a tight monetary policy. The third is that the total social supply and total social demand are basically balanced, but there are contradictions in the structure, cold and heat coexist and the development is unbalanced. At this time, we should adopt a prudent fiscal policy, that is, we should not do too much in total, maintain pressure in structure, strengthen weak links, and reduce investment in overheated industries.
The proactive fiscal policy implemented in China since 1998 is essentially an expansionary fiscal policy. In 2005, according to the national conditions of China and the development of domestic and international economic situation, China implemented a prudent fiscal policy. The implementation background and functions of the two fiscal policies are summarized as follows.
(1) Proactive fiscal policy
1, implementation background
In the middle and late 1990s, the outbreak of the Asian financial crisis directly led to the shrinking demand in the international market, and then evolved into a global economic recession, which led to widespread overproduction and deflation in the world economy. As the largest trading partner of Asian countries, the Asian financial crisis has undoubtedly had a great impact on China's economic operation. Judging from the domestic economic situation at that time, the price level continued to fall, the economic growth slowed down, the domestic investment and consumption demand were insufficient, the income growth of residents slowed down, and the unemployment pressure increased; At the same time, the sluggish demand in the international market leads to the sluggish export of China, and the promotion of export to economic growth is greatly reduced, which fully shows that China's economy has entered the stage of deflation and economic recession. Faced with such a complicated economic situation, the CPC Central Committee and the State Council have timely and decisively formulated and implemented a proactive fiscal policy with the main contents of issuing additional treasury bonds, expanding domestic demand, increasing infrastructure investment, stimulating consumption and expanding exports. The main measures include: first, issuing long-term construction bonds to promote the investment in fixed assets of the whole society. The second is to adjust tax policies to stimulate demand growth. The third is to adjust the income distribution policy and improve residents' consumption psychological expectations. The fourth is to standardize the charging system, reduce the social burden and promote the expansion of consumption. Fifth, support the strategic adjustment of the national economy and promote the reform of state-owned enterprises and the optimization of industrial structure.
2. Positive role
Over the past seven years, the proactive fiscal policy has achieved remarkable results in promoting economic growth, regulating the relationship between supply and demand, and overcoming stagflation.
(1) Promote steady economic development. Large-scale investment in government bonds not only effectively curbed the decline of economic growth, but also curbed deflation. During the period of 1998-2004, the national debt construction funds boosted the economic growth by 1.5 percentage points -2 percentage points on average, the GDP increased by 8.56% on average, and the price level was generally stable.
(2) Optimize the economic structure. The active fiscal policy pays attention to the organic combination of short-term demand management and long-term supply management. While strengthening infrastructure construction, we will develop high-tech industries, transform traditional industries, support some key industries and key enterprises to carry out technological transformation in line with the development direction of industrial structure, and promote economic restructuring and industrial upgrading.
(3) increase employment. In the past seven years, the construction of a large number of new projects and their supporting projects supported by national debt has increased 7 million-10/00000 jobs, which has played a very good role in promoting the development of related industries.
(4) Promote the balanced development of regional economy. Through the inclined financial arrangements for the central and western regions, infrastructure construction and ecological construction such as power transmission from west to east, Qinghai-Tibet railway, returning farmland to forests and grasslands, and six small projects, the investment and business environment in these regions has been improved, the development pace of the central and western regions has been accelerated, and the unbalanced economic and social development pattern between the east and the west has been improved to some extent.
In short, as a countercyclical macro policy, a proactive fiscal policy is basically appropriate and has played an important role in the relatively balanced development of China's economy and society.
3. Negative effects
However, a proactive fiscal policy is, after all, a macro "counter-cyclical" operation and a policy suitable for economic downturn. Since the second half of 2002, China's economy has gradually emerged from the shadow of deflation, showing a trend of accelerated development. In 2003, the national economy finally passed the turning point from a relatively low level to a stable high level, and the GDP growth rate jumped to over 9%. At this time, the implementation of the proactive fiscal policy has brought some negative effects, but also some noteworthy problems, mainly the tendency of blind investment and low-level redundant construction in some industries and regions, the rapid growth of money and credit, and the increasingly obvious constraint of resources on economic growth, which has brought about a tight supply of raw materials for coal, electricity and oil transportation.
(2) A prudent fiscal policy
1, implementation background
From the second half of 2003, China's economy began to emerge from the shadow of deflation, and its economic growth entered the rising stage of a new cycle. First, economic growth is close to the potential level. The GDP increased by 9.3% in 2003 and 9.5% in 2004. Some industries have bottlenecks or resource constraints, indicating that GDP growth is close to the potential output level. Second, prices tend to rise. In 2003, consumer price and commodity retail price index rose by 65,438 0.2% and 0.65,438 0% respectively, while in 2004 they rose by 3.9% and 2.8% respectively. Third, the unemployment rate has slowed down. In 2003, there were 8.59 million new jobs in cities and towns, and the registered unemployment rate in cities and towns was 4.3%. In 2004, 9.8 million people were newly employed in cities and towns, and the registered unemployment rate in cities and towns was 4.2%, down 0. 1% from the previous year. Fourth, local investment is overheated. In 2003, the growth rate of investment in fixed assets was higher than that of total retail sales of social consumer goods 17.6%. In that year, the investment rate rose to 42.3%, which was 3. 1 percentage point higher than that in 2002, and was close to the level of 1993 when the economy was seriously overheated (the investment rate at that time was 43.5%). To this end, the state has taken a series of measures, including monetary means (such as raising the deposit reserve ratio and raising interest rates) and administrative means, to gradually control the signs of local overheating. Under the influence of macro-control, the growth rate of investment in fixed assets dropped significantly from May to June in 2004, but there were obvious signs of rebound from July to June in 2004, with growth rates of 3 1.4%, 26.3%, 27.9% and 26.4% respectively. In the situation of economic cycle transition and local overheating in the national economy, if we continue to implement a proactive fiscal policy, it will not be conducive to controlling the excessive growth of fixed assets investment and alleviating inflationary pressure.
At the same time, the deep-seated problems in economic operation are also highlighted. First, the contradiction between economic growth mode and resource and environment constraints is more acute. At present, China's per capita reserves of important mineral resources such as oil, natural gas, coal, iron ore, copper and aluminum are equivalent to the world average1%,4.5%, 79%, 42%, 18% and 7.3% respectively, especially in 2003, China's GDP accounted for the world. The proportion of investment in GDP is too high, and the contribution of consumer demand to GDP growth rate decreases. In addition, the income gap between urban and rural residents in China is still widening.
Although the fiscal revenue has greatly increased in recent years, due to the increasing cost of fiscal payment reform in China's transition period, the task of supporting economic development is very heavy, and the need to strengthen macro-control, the public risks related to the proactive fiscal policy are also increasing, and the fiscal deficit and debt scale are growing rapidly.
Therefore, the proactive fiscal policy has completed its historical mission, and the adjustment and transformation of fiscal policy is imperative.
2. Feasibility
It is feasible to implement a prudent fiscal policy. Show in:
(1) The implementation of the proactive fiscal policy has led to the rapid growth of investment and credit, and structural contradictions have become more and more prominent. The resulting inflation will inevitably affect the development of the macro economy. If we continue to implement this policy, it will not only be unfavorable to control the excessive growth of fixed assets investment, but also easy to form reverse adjustment; Not only is it not conducive to slowing down the inflation trend, but it is also easy to aggravate the imbalance between investment and consumption and increase the risk and resistance of healthy economic operation. Therefore, it is out of date to continue to implement the proactive fiscal policy, and it should be turned in due course.
(2) From the urgency of avoiding risks, it is also necessary to speed up the adjustment of current fiscal policy. The implementation of proactive fiscal policy is mainly achieved by the government issuing a large number of government bonds for infrastructure investment. On the one hand, it makes the economic growth excessively dependent on the issuance of national debt, on the other hand, it also makes the scale of national debt bigger and bigger. Up to now, the accumulated national debt for long-term construction alone has reached 910 billion yuan, and the central government is highly dependent on debt, accumulating a large number of contingent liabilities in the economy, increasing the pressure on financial operation.
(3) The implementation of the proactive fiscal policy has basically brought China's economy out of the deflationary period and entered a new round of rising period. The ability of independent economic growth has been significantly enhanced, a large amount of funds have surged in the society, and people's awareness of investment has gradually increased, which is enough to alleviate the economic fluctuations caused by the government's reduction of investment.
Two. monetary policy
(A) Review of China's monetary policy operation during the transition period.
Before the reform and opening up, China implemented a highly centralized planned economy system, and macro-control mainly relied on planning and financial means, while monetary and credit means were in a subordinate position. Under the "unified" financial structure, the People's Bank of China integrates many functions of the central bank, specialized banks, banks and non-bank financial institutions, and monetary policy is actually a comprehensive credit policy. In the 1980s, with the transformation from the traditional planned economy system to the market economy system, the operation mode of financial reform and monetary policy has also undergone great development and changes. The People's Bank of China began to perform the functions of the central bank in 1984, and the centralized and unified planning management system was gradually transformed into a macro-control system dominated by direct state regulation. Although the management of credit cash plan still dominates, indirect financial instruments have begun to be used. During this period, China's economy developed rapidly. Super-economic growth produces a large amount of money, which leads to the imbalance between supply and demand of commodities and the continuous rise of prices. In response to three monetary expansions, the Bank of China has implemented three monetary contractions.
In 1990s, with the deepening of China's financial system reform, the operation of monetary policy gradually turned to indirect regulation. From 1993 to 2005, the operation of China's monetary policy can be clearly divided into three stages: the first stage, from 1993 to 1997, through the implementation of moderately tight monetary policy, inflation was actively controlled and a "soft landing" was successfully achieved; In the second stage, 1998-2002, monetary policy was characterized by moderate relaxation, aiming at controlling deflation and promoting economic growth. In the third stage, from 2003 to now, the obvious feature of monetary policy regulation is to prevent a new round of economic overheating.
Monetary policy operation of1.1993-1997
Due to the decentralization of state-owned enterprises and the existence of soft budget constraints in the middle and late 1980s, China's economy showed an obvious "bubble" momentum in the early 1990s, which brought a series of problems: First, investment and consumption demand expanded at the same time; Second, inflation is as high as double digits; The third is the extraordinary growth of money supply; Fourth, the financial order is chaotic.
In view of the serious inflation in 1993- 1994, the central government began to implement a four-year "soft landing" macro-control from 1993- 1997. Starting with managing the financial order, we should deepen the reform of the financial system, guide financial transactions, improve the construction of financial laws and regulations, strengthen the macro-control ability of the central bank, and strengthen the coordination among macro-policies. The monetary policies adopted during this period mainly include: First, rectifying the financial order. Second, it has strengthened the macro-control ability of the central bank. Thirdly, the intermediate goal of monetary policy has been adjusted and new monetary policy tools have been adopted. From the third quarter of 1994, the central bank officially announced the quarterly money supply index to the society, and announced that the money supply was one of the control targets of the monetary policy at the beginning of 1995, and announced the annual control target of the money supply from 1996. Fourth, flexible use of interest rate leverage to strengthen interest rate supervision. Fifth, implement the exchange rate integration, intervene in the exchange rate formation, and coordinate the use of local and foreign currency policies. Through the comprehensive application of the above-mentioned monetary policies and the cooperation of other policies, the financial macro-control initiated in the second half of 1993 with the primary task of rectifying financial order and controlling inflation has achieved remarkable results. Through four years of macro-control, China's economy has also successfully achieved a "soft landing"
2. 1998-2002 monetary policy operation
1998-2002, the People's Bank of China actively adopted various monetary policy measures in view of the deflation situation faced by China, mainly including: First, greatly reduced the interest rate level, expanded the floating range of loan interest rates, and steadily promoted the process of interest rate marketization. 1998, the central bank * * * lowered the interest rate level three times. In February 2002, 10, 1 day, the interest rate of residents' savings deposits was 1.98%. Second, increase the intensity of open market operations and flexibly regulate the base currency. The People's Bank of China launched the open market business for the first time in April 1996. After the resumption of 1998, open market business has increasingly become an important tool for monetary policy operation. 199, the turnover of open market bonds was 707.6 billion yuan, and the net investment of base currency was1919.7 billion yuan. In 2000, in order to control the liquidity of commercial banks and stabilize the growth rate of money, the People's Bank of China shifted from putting base money in the previous two years to recycling excessive liquidity of commercial banks. Third, cancel the loan limit control, flexibly use the credit policy and adjust the loan structure. Fourth, strengthen the "window guidance" for commercial banks.
3.2003-2005 monetary policy operation
During this period, the monetary policy adopted by the central bank mainly includes: First, gradually improve the open market operation system, flexibly carry out open market business, and maintain the stable growth of the base currency. Since 2003, China's foreign exchange supply has continuously exceeded demand, and its annual foreign exchange reserves have continuously increased (see Table 3). Second, give full play to the regulatory role of interest rates and gradually promote the reform of interest rate marketization. February 2, 20021After lowering the deposit and loan interest rates of financial institutions for the last time, with the change of macroeconomic situation, the central bank began to raise interest rates. At the same time, in line with the guiding ideology of liberalizing the money market interest rate and bond market interest rate first, and then gradually promoting the marketization of deposit and loan interest rates, the marketization of deposit and loan interest rates follows the principle of "foreign currency first, local currency later; Loan first, then deposit; Long-term first, big, short-term, small "order. Third, give play to the positive role of credit policy in economic adjustment. Fourth, the reform of the RMB exchange rate system has been gradually deepened, the exchange rate formation mechanism has been gradually improved, and foreign exchange reserves have grown steadily. In recent years, the People's Bank of China has been exploring the reform of the exchange rate system and has taken a series of measures to deepen the reform of the foreign exchange management system, maintain the stability of the RMB exchange rate and promote the balance of international payments. As for the exchange rate formation mechanism, with the approval of the State Council, the People's Bank of China announced that it would implement a managed floating exchange rate system based on market supply and demand with reference to a basket of currencies from July 2, 2005. The central bank and the State Administration of Foreign Exchange also took this opportunity to speed up the reform of the foreign exchange management system and vigorously develop the foreign exchange market.
Three. Fiscal and Monetary Policies under the Current Economic Situation
On June 5438+065438+ 10, 2008, the the State Council executive meeting proposed that under the background of the increasingly severe world financial crisis and the increasingly obvious impact on China's economy, China's macro-control policies have been greatly adjusted, and a proactive fiscal policy and a moderately loose monetary policy have been implemented, and 4 trillion yuan of funds will be allocated in the next two years to vigorously start domestic demand and promote stable economic growth.
The meeting pointed out that in order to resist the adverse impact of the international economic environment on China, we must adopt flexible and prudent macroeconomic policies to cope with the complicated and changeable situation. At present, it is necessary to implement a proactive fiscal policy and a moderately loose monetary policy, and determine ten measures to further expand domestic demand, involving speeding up people's livelihood projects, infrastructure, ecological environment construction and post-disaster reconstruction, raising the income level of urban and rural residents, especially low-income groups, and promoting steady and rapid economic growth.
Judging from various experts, the international financial crisis sweeping the world has a greater adverse impact on China's economy than the Asian financial crisis of 1998. At present, external demand is weakening, some enterprises have difficulties in operation, investment is declining and domestic demand is sluggish. If effective measures are not taken in time, China's economy is in danger of declining. At this time, it is necessary to reactivate the proactive fiscal policy, cooperate with the implementation of moderately loose monetary policy, expand the scale of investment, and start domestic demand.
Proactive fiscal policy is to make fiscal policy play a more direct and effective role in starting economic growth and optimizing economic structure by expanding fiscal expenditure. After 1998, this policy played an important role in coping with the Asian financial crisis and the catastrophic floods in China, effectively stimulating economic growth. In 2005, in view of the obvious acceleration of domestic social investment and abundant economic vitality, the proactive fiscal policy was officially withdrawn after seven years of implementation and turned into a prudent fiscal policy.
Appropriate loose monetary policy is intended to increase the money supply, while continuing to stabilize the overall price level, which should play a more positive role in promoting economic growth. During the period of 1998, China implemented a proactive fiscal policy and a prudent monetary policy. In the second half of 2007, the monetary policy changed from "prudent" to "tight" in view of the phenomenon of excessive price increase and high investment and credit in the economy. Nowadays, the shift of monetary policy to "moderate easing" means a major shift in the orientation of money supply.
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