A SINGLE-CHANNEL BUDGET MODEL IN THE PEOPLE’S REPUBLIC OF CHINA
This article is devoted to SCO and BRICS summits that will be held in Ufa in 2015. Because the heads of the member states discuss problems of economic and political cooperation, it makes sense to exchange experience of managing the economic development in these countries. The People’s Republic of China is a member of both organizations that manifests the high rate of the economic growth over a few decades. The article shows that the Chinese fiscal system is one of key factors of its economic growth. The author reviews literature on the influence of the fiscal system construction on the economic growth, in particular, on the fiscal federalism and its two forms: highly competitive and low competitive. The article gives a detailed description of the single-channel budget model used in the People’s Republic of China in 1980–1993, when economic reforms began. It describes various methods of intergovernmental fiscal relations applied to within the framework of this model. The single-channel fiscal system, called in China as a system of “fiscal coppers sharing”, created effective fiscal incentives for economic development. In the early 1990s there was an interest in this model in Russia. In particular the Republic of Bashkortostan and the Republic of Tatarstan (subnational units of the Russian Federation) tried to introduce such a system into their relations with the federal government in 1992 and 1993. But the latter as well as the western advisers rejected the system. As a result, the Russian fiscal system developed in a way different from the Chinese one, there was an attempt to introduce a western-style fiscal system. The Russian economy does not demonstrate the high rate of economic growth as China, and one of the reasons is the current construction of the Russian fiscal system. The article develops a thought that the single-channel budget model can be interesting for Russia from the point of view of accelerating the economic growth. Such a problem can be discussed in preparations for SCO and BRICS summits.