National Fiscal Policy Research, The Development Of Private Enterprises

Since the reform and opening up, private enterprises that mainly are SMEs(small and medium enterprises), have gained unprecedented opportunities for development. There are many reasons leading to the rapid development of private enterprises. In addition to clear property rights, strategic adjustment of state-owned enterprises, the labor cost advantage, national economic policy on private enterprises is one of the major reasons for the rapid growth. The development of private enterprises is positively related to national economic policy. The greater national economic policy supports, the faster private enterprises might grow. When national economic policy is not positive to the development of private enterprises, the development of private enterprises would slow down. National fiscal policy reflects the national will, and it is an important component of economic policy. The degree of its supporting to private enterprises, directly affects the survival and development of private enterprises.A dissipative structure is a kind of dynamic, stable and orderly structure. Private enterprises maintaining a dissipative structure means they can develop sustainably. This will require private enterprises to meet the four conditions of dissipative structure: opening, nonlinear, the giant fluctuation and far-from equilibrium state. Compared with the state-owned enterprises, with a strong motivation for the economic interests and a relatively high degree of market orientation, private enterprises have better conditions to maintain the dissipative structure. However, there are also aspects of vulnerability in the dissipative structure of private enterprises in China. This vulnerable dissipative structure means that the ability of sustainable development of private enterprises in China is not robust. Particularly under the impact of the financial crisis, the financing of private enterprises and product realization have restricted the opening of private enterprises. At the same time, without the features of a strong nonlinear state, an obvious fluctuation and far-from equilibrium, private enterprises would be vulnerable to financial crisis. In times of financial crisis, to maintain a dissipative structure of private enterprises not only requires their own efforts, but also need the state to play a role of "visible hand". Through the formulation of economic policy, especially fiscal policy, state creates external conditions for private enterprises to maintain a dissipative structure.Most private enterprises in China are SMEs. Financial support for SME is an important aspect of public fiscal policy. There are sufficient theoretical bases for national fiscal policy to support development of private enterprises. Subject to the measures of fiscal policy, values, functions and so on, are the basic theories of fiscal policy. These are basic theories that the state fiscal policy support private enterprise. The national financial policy-making, as a "cane" and a "refuge", provides the basis for fiscal policy to support the development of private enterprises. Public interest-oriented values of national fiscal policy, provides a theoretical support to private enterprises, especially for private SMEs. The roles of state fiscal policy in allocating resources, maintaining economic stability, redistribution and other functions are enough for the state fiscal policy to support development of private enterprises. In addition, the Scientific Outlook on Development also requires the national fiscal policy to support development of private enterprises.The types and instruments of fiscal policy are influenced by many factors: economic factor, social factor, natural custom factor, and financial factor. In the context of the financial crisis, if certain conditions are met, the proactive fiscal policy is effective. It mainly through the changing in expenditure and income, which could support the development of private enterprises. By expanding the spending in private enterprise or adjusting the structure of expenditures, fiscal policy may increase the income of private enterprises or guide their conduct. By changing the total amount of revenue and tax structure, it may relieve the burden on private enterprises or guides their conduct. State fiscal policy can affect private enterprise by following four ways: to establish exchanging relationship with the private enterprises, to support the development of intermediary organizations that are conducive to private enterprises, to control the external environment, and to allocate the financial funding. In the process of specific policy operation, specifical choice is in line with types of private enterprises and the difficulty of operation.Effectiveness of national fiscal policy has always been a controversial topic. Economic theories are all byproducts of solving a specific problem. The effectiveness of fiscal policy is related to the economic background. Active fiscal policy does have a "crowding out" effect. That is, expansionary fiscal policy leads to economic growth through the multiplier, but it would also increase interest rates, which might inhibit the investment of private enterprises. Empirical analysis shows that though there is some "crowding out" of china's fiscal policy, but "crowding out" is not obvious. That is, the proactive fiscal policy creates a favorable macroeconomic environment for our country and does not generate significant "crowding-out effect". In the context of the financial crisis, marginal propensity to consume, the sensitivity of investment to interest rate, the sensitivity of money demand to income have exhibited a decreasing mode, however, sensitivity of money demand to interest rate has appeared an increase trend. These will make the fiscal policy of "crowding out" effect slighter. At the same time, so far, there has been no real financial crisis in China. In this case, the marginal propensity to import during the financial crisis is increasing. These factors make"crowding out" effect still small during the financial crisis. In the context of the financial crisis, Private enterprises of different sizes are of different needs in national fiscal policy. The listed private enterprises seek to"minimize debt," while small and medium private enterprises pursue the aim of "profit maximization". All these need different requirements for fiscal policy to support private enterprises.Because of economic globalization, foreign financial crisis influences China mainly through international trade, international finance, and international production. It is a necessary choice of the government to help enterprises cope with the financial crisis through implementation of fiscal policy. In Asian financial crisis beginning in the 1997 and druing international financial crisis beginning in the 2008, China's proactive fiscal policy was implemented. China successfully coping with the Asian financial crisis is not only attributed to the implementation of positive fiscal policy, but also to the rapid development of private enterprises. During the international financial crisis period, the implementation of the proactive fiscal policy and development of private enterprises are equally important decisive response to the crisis.In the two financial crises, there is some correlation between national fiscal policy and private enterprises. Compared with the Asian financial crisis period, in the international financial crisis, China's proactive fiscal policy functions more to private enterprises. However, the changes in background and status of private enterprises reveal that previous fiscal policy to support development of private enterprises is still inadequate. To this end, national fiscal policy should be more inclined to the help of private enterprises. In the implementation of proactive fiscal policy, we must fulfill non-public economic policy. Since the vast majority of small and medium enterprises are private enterprises, national fiscal policy for supporting private enterprise is reflected in the aspect of supporting to SMEs. Budget should be increased in SMEs. Public funds can be raised for SMEs by issuing special bonds. Taxation should play an important role in financing support for SMEs. Fiscal policy should also pay attention to support labor-intensive, small and medium enterprises and guide private enterprises to upgrade and enhance sustainable development capacity.This article has six parts, namely, an introduction and the main parts, which are five chapters. In the introduction part, topics and historical context, current research situation, research ideas, methods and innovations of research are included. Chapterâ… is to study the relationship between the national economic policy and development of private enterprises. From the perspective of economic history and theory of dissipative structure, the author tries to explain that the national economic policy is an endogenous variable to the development of private enterprises, and then provides a basis for the analysis of national fiscal policy to the development of private enterprises. In chapter II, from a theoretical perspective, the author analyses why national fiscal policy support private enterprises, and how to. In chapter III, the author introduces the national fiscal policy effects on private enterprises development. and analyzing "crowding out" effect caused by national fiscal policy on private enterprises is focused on. The author tries to explain that"crowding out" effect on private enterprises from fiscal policy in China is small. And then, from the perspective of IS-LM curve and from the perspective of balance sheet, the author also analyzes effect of fiscal policy on private enterprises in the financial crisis. In Chapter IV and Chapter V, the relationship between China's proactive fiscal policy and private enterprises is studied. In the context of the two financial crises, particularly since the international financial crisis, active fiscal policy has provided a development opportunity for the development of private enterprises.However,the current state fiscal policy for small and medium private enterprises is still insufficient, therefore suggestions and advices on policy will be put forward.