The Path Choice Of China 's All - Caliber Budget Management System Reform

The concept of "full-covered" budget was first formally raised in Hu Jintao’s report at the 18th Party Congress. It means all the government revenues shall be subject to unified management. Its goal is to create a government budget that covers all the revenues and to ensure no revenues or expenditures are out of the budget. It is notably featured with the Chinese characteristics. It absorbs foreign experiences and is based on the fundamental realities of China. Its theory originates in modern public budgetary theory, public choice theory and public fiscal theories.After the Third Plenary Session of the 11th Central Committee of the Party, China started to enter the market economy track, and a new budget system gradually came into being. Through the reforms of ministerial budget, "enhance the two lines of revenues and expenditures" and the collection and payment of the exchequer, not only did we successfully created a fiscal budgetary framework with Chinese characteristics but also creatively developed democratic budgetary system that obeys the laws of market economy and modern finance.The second chapter of the thesis analyzes the status quo of China’s budgetary system. Currently, China’s full-covered budget is at its initial stage. General public budget, state-owned capital business budget, government fund budget and social security fund budget have been set up yet without "interaction" or "support" among each other. There are still several shortcomings:after the reform of the system of tax distribution, the mismatch of the fiscal power and executive power of the local government hinders the healthy growth of local finance. They cannot keep the ends meet. There are loopholes of the expenditure management with inefficiencies of capital usage. The improper fiscal power distribution between the central and local governments hinders the budget function. There is no check of balance among the people’s congress, the court and the government in regard of budgetary power, and an effective fiscal supervision system has not been established.The third chapter of the thesis studies the difficulties in China’s full-covered budget system reform. First, fragmentation of budgetary administration, some important items not included in the budget; fragmentation of subject responsibility, the right, limits of right and responsibility not clarified in the multi-layered budget; fragmentation of budgetary departments, decision making power lying in different government departments. Second, budgetary supervision of the people’s congress at a "soft constraint" status, without accountability system on the responsibility subject.Finally the thesis studies foreign budgetary management experiences, and tries to seek the right path for China’s full-covered budget management system based on China’s current fiscal systems. First, we should clarify the management goals from the legislation and executive levels, design the basic framework of full-covered budget management featured by fiscal unity, total control and transparency. Second, the thesis explains the four focuses of the reform of the full-covered budget management: perfect budget management system, create budget in a scientific way, enhance budget supervision, and improve budgetary accountability.