China's Internal-External Equilirium Policy Coordination

Since the reform of RMB exchange rate regime on July,2005, China's economy has performed new characteristics. Especially from 2007, China's economic development went into an inflection point: the lower economic development rate and the higher inflation rate. The apparent internal-external disequilibrium goes against sustainable development of China's economy. So it is necessary to analyze the root causes of these phenomena from a new sight.The article first use the three-gap model to analyze the internal and external imbalances in the overall performance, focusing on analyzing the economic indicators of invest-save gap and revenue-expenditure gap, mining the root causes. After the analysis, the article provides some scientific,rational and controllable suggestions for solving internal-external disequilibrium.The innovations of this article: choosing the invest-save gap and revenue-expenditure gap for further analysing the internal-external disequilibrium of economy; during the period of analyzing the performance of fiscal policy, the article uses the further adjusted M-F model to compare different effects of different expanding measures.