CHIN

BUDGET
A
BY : SAYED FARHAD QATTALI
SHAFI SADIQI, HASIB SARWARY
introduction
History
The importance of China's budget
Key Components of China’s Budget
Revenue Sources
Expenditure Categories
TABLE
Fiscal Policy & Economic Goals
Budget Allocation Challenges
OF
Implications for Global Economy
 HISTORY
The history of China’s budger dates back
thousands of years, with the country having a
long tradition of fiscal management and
planning .
However, this response will focus on important
milestones and significant developments in
China’s budget system since the establishment of
the People’s Republic of China in 1949.

1 2
EARLY YEARS
(1949-1978)
Following the Communist Party's
victory in the Chinese Civil War, China
implemented a command economy,
where the state had almost complete
control over economic planning and
resource allocation.
The government established a
centralized planned budget system, with
all revenues and expenditures controlled
by the central authorities.
During this period, China relied
heavily on state-owned enterprises and
collectivized agriculture, with the
budget largely funded by direct taxes
and contributions from these entities.
HISTORY
ECONOMIC
REFORMS
(1978-1990)
In the late 1970s, under the leadership of
Deng Xiaoping, China embarked on
economic reforms and began gradually
decentralizing its budget system.
The fiscal system was reshaped to allow
local governments greater control and
autonomy over their finances.
The tax-sharing system was introduced to
promote fiscal transfers between the
central and local governments, ensuring a
more equitable distribution of fiscal
revenues.
China's budget began to rely more on
indirect taxes, such as value-added tax,
corporate income tax, and personal income
tax, rather than direct taxes on production
and consumption.
3 4
GROWTH & RECENT
MODERNIZATION DEVELOPMENT
China(1990-2000)
China has made continuous efforts to
experienced rapid economic (2010-PRESENT)
strengthen its budgetary system, with an
growth during this period, leading to an
emphasis on improving fiscal
increased demand for public infrastructure
sustainability, reducing debt, and
and services.
enhancing fiscal discipline.
The government started implementing
Reforms have been introduced to tackle
comprehensive reforms to strengthen
issues like local government debt, balance
fiscal management, improve transparency,
between revenue levels, and expenditure
and enhance budget planning and
responsibilities.
execution.
Increased attention has been given to
Budget reform focused on consolidating
environmental protection, innovation, and
revenues, controlling expenditures, and
technology development within budget
improving efficiency in the use of public
planning.
funds.
The government has also introduced
- Social welfare spending increased
measures to address income inequality and
significantly, targeting poverty reduction,
promote inclusive growth through targeted
healthcare, education, and social security.
social assistance programs and tax
reforms.
THE IMPORTANCE OF
CHINA’S BUDGET IN THE
WORLD
China's budget plays a significant role in the global
economy and has important implications for various
stakeholders. Here are a few reasons illustrating the
importance of China's budget in the world:
ECONOMIC
IMPACT
China is the world's second-largest economy, and its budget plays a
crucial role in determining the country's economic direction. The
government's spending decisions, including infrastructure investments,
social welfare programs, and defense expenditures, have ripple effects
on both domestic and global markets. China's budget influences global
commodity prices, trade patterns, and financial markets, making it a key
driver of global economic growth.

GLOBAL TRADE AND

INVESTMENTS
China's budget allocations impact its import and export policies, which
can have a substantial effect on global trade. The country's budgetary
decisions influence import tariffs, export subsidies, and investment
incentives, thereby shaping international supply chains and trade
flows. China's substantial foreign exchange reserves also make its
budgetary decisions impactful in terms of foreign investments,
overseas acquisitions, and foreign aid.
GEOPOLITICAL
INFLUENCE
China's budget has geopolitical implications as it determines the country's
military expenditures and strategic capabilities. An increase or decrease in
defense spending can impact regional security dynamics and potentially influence
neighboring countries' defense budgets. Moreover, China's budget also supports
its global influence through foreign aid and investment, which enhances China's
soft power and expands its geopolitical reach.

CLIMATE CHANGE AND ENVIRONMENT

China's budget has implications for global climate change policies and environmental
sustainability. As the world's largest emitter of greenhouse gases, China's budget
decisions regarding environmental protection and renewable energy can significantly
impact global efforts to combat climate change. China's commitment to clean energy
investment, emission reduction goals, and initiatives like the Belt and Road Initiative
can shape the global environmental agenda.
KEY
COMPONENTS
OF CHINA’S
Revenue Sources
This includes all the income generated by
SUBSIDIES
The government provides
the government, such as taxes, fees, and subsidies for certain sectors or

BUDGET
other sources of income industries to promote their
development and maintain
EXPENDITURE CATEGORIES competitiveness. This includes
subsidies for agriculture,
This includes all the expenditures made by the renewable energy, and
government, such as infrastructure development, strategic industries.
healthcare, education, defense, social welfare, and
other sectors.
 FISCAL POLICY &
ECONOMIC GOALS
2
1 ECONOMIC 3
ECONOMIC GROWTH DEMAND
STABILIZATIO China's fiscal policy is aimed at promoting MANAGEMENT
sustained and balanced economic growth.
N aims to
China's fiscal policy ensure
The budget allocates resources to strategic
China's fiscal policy aims to ensure
macroeconomic stability by using various macroeconomic stability by using various
tools, including fiscal measures. For sectors, such as infrastructure development, tools, including fiscal measures. For
example, during an economic downturn, innovation, and technology, to drive example, during an economic downturn,
the government may increase government economic expansion. In recent years, there the government may increase government
spending and decrease taxes to stimulate has been a focus on transitioning from spending and decrease taxes to stimulate
economic growth and stabilize employment export-led growth to a more consumption- economic growth and stabilize employment
driven and innovation-led model.
 CONTINUE.
4
REGIONAL
DEVELOPMEN 5 ..
T aims to
China's fiscal policy reduce POVERTY
regional disparities and promote balanced
regional development. The budget allocates
ALLEVIATION
resources to less-developed regions to China's fiscal policy plays a pivotal role in
stimulate growth, improve infrastructure, poverty alleviation efforts. The government
and enhance public services. This helps to utilizes the budget to allocate resources for
address income inequality and promote targeted programs, social safety nets,
social harmony. education, healthcare, and infrastructure
development in poverty-stricken areas.
This aims to improve living conditions and
reduce poverty rates across the country.
BUDGET ALLOCATION
CHALLENGES
Regional Social Welfare and Aging
Disparities
China has significant regional
disparities, with more developed
coastal regions often receiving greater
budget allocations compared to inland
and rural areas. This imbalance can
hinder balanced regional development
and exacerbate income inequality.
The challenge is to ensure more
equitable distribution of resources and
address disparities in budget
allocation.
Population
China's aging population and
increasing social welfare needs
pose challenges for budget
allocation. As the population ages,
there is a growing demand for
healthcare, pensions, and social
assistance programs. Allocating
sufficient resources to address these
needs while maintaining fiscal
sustainability is a complex task.
Infrastructure
Development
China requires substantial investment
in infrastructure to support economic
growth and improve connectivity
across the country. Allocating
resources to infrastructure projects
while managing the fiscal deficit and
debt levels presents a challenge.
Prioritizing and efficiently allocating
funds to critical infrastructure projects
is necessary for balanced development.
BUDGET ALLOCATION
CHALLENGES
Innovation and Technology Investment
To drive long-term economic growth, China aims to become a global leader in innovation and
technology. Investment in research and development, fostering innovation-driven industries, and
promoting entrepreneurial activities is crucial. Allocating adequate resources to support these
initiatives is essential to maintain competitiveness and expand the innovation ecosystem.

State-Owned Enterprise (SOE) Reforms

China's state-owned enterprises play a significant role in the economy. Reforms to
enhance their efficiency, competitiveness, and transparency require careful budget
allocation. Ensuring that budget resources are effectively utilized for SOE reforms is a
challenge to achieve desired outcomes
BUDGET ALLOCATION
CHALLENGES
Global Trade and Investment

China's budgetary decisions can impact global trade patterns and investment flows. As the world's
second-largest economy and a major trading nation, changes in China's budget policies, such as
import/export regulations, tariffs, and subsidies, can have a direct effect on global trade
relationships and investment decisions. China's budget priorities and allocation in sectors like
manufacturing, technology, and infrastructure development can shape global supply chains and
investment trends.

Global Demand and Consumption

China is a major consumer market for goods and services. Changes in China's budget policies,
such as tax measures and social welfare programs, can affect domestic demand and consumption
patterns. As the Chinese economy grows, its increasing consumer spending power has ripple
effects on global markets, particularly in sectors such as automotive, luxury goods, and consumer
electronics.
 Commodity Prices and
Resource Demand
China's budget allocation for
infrastructure development,
construction,and manufacturing
can impact global commodity
prices and demand for resources
such as metals, energy, and
agricultural products. As China
invests in infrastructure projects, it
drives demand for raw materials,
affecting global commodity
markets and the economies of
commodity-exporting countries.
Exchange Rates and
Currency Markets
China's fiscal policies, including
its budget decisions, influence its
currency, the yuan (Renminbi), and
can have implications for global
currency markets and exchange
rates. Fluctuations in the yuan
value, which can be influenced by
China's budgetary measures, can
affect trade competitiveness, cross-
border transactions, and global
financial market stability.
Financial Stability and
Investments
China's budgetary policies and
management of public finances
have implications for global
financial stability. China's actions
to maintain fiscal discipline,
manage public debt, and control
financial risks impact investor
confidence and global financial
markets. The stability of China's
banking and financial systems, as
influenced by budget policies, is
important for overall global
economic stability.
OUR TEAM

SAYED FARHAD SHAFI HASIB

QATTALI SADIQI SARWARY
THANK YOU