ECONOMIC-REFORMS AND PUBLIC-FINANCE IN CHINA

The paper addresses the implications of the economic reforms for public finances in transitional economies. The paper outlines the anatomy of the public finance problem which has arisen in China in the 1980s and suggests guidelines for a short-term tax reform and a long-term design for China, which mutatis mutandis apply also to other transitional economies. The first part of the paper analyzes the changes in government revenue and expenditure and their composition. The second part outlines the current tax system and suggests possible direction of reform and is followed by concluding comments.