The Research On Optimum Structure Of Financial Expense In Some Counties And Villages Of Depressed Area

Nowadays poverty is already a problem no one can take lightly, which also become an obstacle of holding back economic development and social stability. By the end of 2005, there are still592 depressed counties and 21.480million poor population in China. Although China became a socialist country as early as 1956 and now we are trying to build a well-off society in an all-round way, however not only the poverty problem is still alive but the gap between the rich and the poor is even bigger, which indeed is a kind of abnormal social phenomenon. Marx once divided the poverty into two parts: absolute impoverishment and under privilege, which reveals the basic poverty type. Though under privilege could be defined differently in different societies, absolute impoverishment plays an important part in relieving and maintaining the basic rights to the live of the poor. Comparing with other countries, China could not only use market mechanism to solve poverty, for whom has special and complex state and is facing difficult task to structure transfer. Therefore it is essential to make macro-control by government, particularly to play their functions by the grass-roots government.Financial activity is a kind of governmental measure, which reflects roles of government and orientation and scope of its activities. For the depressed areas, financial plays an implacable role to economic and social development and is laid heavy burden on in economy and social stability. The Communist Party and the government at all levels pay high attention to finance and drum in increasing financial transfer payments and investment to improve the rapid development of society and economy in base areas,minority nationality regions,border areas. In sharp contrast, the current status of financial expenses is not so optimistic in some depressed counties and villages: lack of due expenses, limited total amount of construction expense, deficit expenses to agriculture in counties and public products in rural areas, outstanding contradictory between income and expenses, disordered management in expenses, vicious circle of finance used for human affairs expense, and serious financial risks. The financial expense structure is not optimized, which severely becomes an obstacle in the transfer of economic gain mode, human resource development, and social just and fair, even the social and economic sustainable development in poverty areas. Therefore, it admits of no delay to optimize the structure of financial expenses in counties and villages, for which has become an important content of public financial architecture required by socialist market economic system, and also the keystone of financial theory research and practical work in the near future and at the same time which is not only an expedient measure but a permanent cure. Optimizing the structure of financial expenses is an effective way to ease the contradiction between income and expenses as well as an important measure to solve the poverty problem in some counties and villages of poverty stricken areas.This paper discusses the necessity and feasibility of optimum structure of financial expense in some counties and villages of depressed area, not only analyzing the contradiction and problem which are the causes of the current predicament facing to some counties and villages in poor areas, but at the same time offering some measures to solve this tough problem. By analyzing a particular case, this paper makes a description to the status quo of the finance in some poor counties and villages and further points out the reasons why the structure of financial expenses is not optimized. Based on the analysis of theory and by Pareto Principle, this paper also demonstrates the optimized principles and standards of the structure of financial expenses areas as well as the practical thoughts and measures to consummate this kind of optimized principles in poverty stricken, for one thing which could combine internal optimum with external principle in financial system, for another which could solve the problem of financial expense structure. These measures could realize the combination between economic and social benefits of financial expense and make the limited financial resources in these areas play more active role with the ultimate goal to develop economy and shake off poverty for the people in depressed areas in China.