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Library China : Improving Rural Public Finance for the Harmonious Society

China : Improving Rural Public Finance for the Harmonious Society

China : Improving Rural Public Finance for the Harmonious Society

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Date of publication
June 2012
Resource Language
ISBN / Resource ID

This report aims to assist the
government in improving implementation of the New Socialist
Countryside (NSC) program, especially in raising the
effectiveness of public expenditures, and the harmonization
of public finance. While this report pays particular
attention to rural aspects of public finance, it addresses
this topic within the overall framework of intergovernmental
finance that impacts both rural and urban areas. Similarly,
the discussions and recommendations in this report are
intended to move the system towards one that is harmonized
and does not differentiate between 'rural' and
'urban' areas. The structure of this report is as
follows: Chapter 2 analyzes the considerable number of
reform efforts that have been introduced to the rural public
finance system. It looks at the RFR in depth, as well as
other associated and related reforms and evaluates the
overall outcome of these reforms. Chapter 3 provides an
overview of China's intergovernmental system as the
framework for rural public finance. It includes an analysis
of the expenditure and revenue assignments and their
development, and the impact on rural public finance. The
transfer system, an integral part of the intergovernmental
fiscal system, is treated separately in Chapter 4 because of
its overwhelming importance for rural public finance. The
chapter analyzes how far the transfer system goes in
addressing the fiscal imbalances and providing the necessary
public funds for rural areas. It also assesses the role of
earmarked transfers. Chapter 5 then looks at the public
finance situation at the grassroots level, i.e., the
financing of villages, townships, and counties, including
how recent developments have impacted their situation and
what remaining issues exist at these levels. Finally,
Chapter 6 summarizes the findings of this study, proposes a
strategy for policy reforms, and suggests ideas for its implementation.

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