Study on Fiscal Transfer Payment System Reform in China—Based on the Perspective of a New Road to Urbanization

Shiqin Guo, Jie Zou

School of Economics and Management, Southwest Jiaotong University, Chengdu, China.

DOI: 10.4236/me.2015.68082                

Abstract

With rapid development of urbanization after China’s reform and opening up, the transfer payment system has been reformed and improved constantly since it was implemented in 1995. But through empirical analysis on the implementation effect in this article, we find that the objective of China’s transfer payment system is not effective realized. After further discussion on the current transfer payment system and problem analysis, we find there still are defects in the structure setting, measuring system, capital allocation method and other aspects. As a result, the article takes factor method as the breakthrough point to further reform and optimizes the current transfer payment system, and gives the corresponding countermeasures and suggestions to promote the healthy development of China’s urbanization.

Keywords

Transfer Payment, System Reform, New Road to Urbanization

Conflicts of Interest

The authors declare no conflicts of interest.

References

[1]	Wei, H.-K. (2014) A New Road to Urbanization with Chinese Characteristics. Social Sciences Academic Press, Beijing, 13-25.
[2]	Zeng, H.-Y. (2012) Study on Standardization Systems for Equalization of Basic Public Services and Assessment Method of Fiscal Transfer Payment in China. Economic Research Journal, 6, 20-32.
[3]	Fu, W.-L. and Shen, K.-R. (2012) Equalizing Transfer Payment and the Structure of Local Government’s Expenditure. Economic Research Journal, 5, 45-57.
[4]	Song, X.-N., Chen, B. and Liang, R.-B. (2012) Can General Purpose Transfers Promote Basic Public Services? The Journal of Quantitative & Technical Economics, 7, 33-43.
[5]	Ju, H. (2006) Market Mechanism in Public Services: Theory, Methods and Techniques. Peking University Press, Beijing, 267-342.
[6]	Zhou, Z.-Q. and Qiao, Z.-M. (2011) Financial Development, Input of Public Finance and Urbanization. Urban Studies, 18, 17-20.
[7]	Zhang, X.-J. (2013) Research on the Synergy Effects of Policies between New Urbanization and the Equalization of Basic Public Services. Economy and Management, 27, 5-12.
[8]	Tsui, K. (2005) Local Tax System, Intergovernmental Transfers and China’s Local Fiscal Disparities. Journal of Comparative Economics, 33, 173-196. http://dx.doi.org/10.1016/j.jce.2004.11.003
[9]	Ma, H.-T. and Jiang, A.-H. (2010) Financial Transfer Payment System between Governments. Economic Science Press, Beijing, 111-134.
[10]	Zhong, X.-M. (1997) Discussion of Financial Transfer Payment System between Governments. Economic Research Journal, 9, 44-49.
[11]	Shah, A. (1994) The Reform of Intergovernmental Fiscal Relations in Developing and Emerging Market Economics. Policy and Research Series 23, The World Bank, Washington DC. http://dx.doi.org/10.1596/0-8213-2836-0