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This overview first discusses some traditional thoughts on public finance, particularly the thought of implicit taxation, which have had a profound influence on the behavior of the Chinese government historically and currently. It then describes public finance under the centrally planned economic system, followed by an examination of market-oriented public finance reforms before exploring the challenges to China’s public finance. Finally it explains the contributions of this book. By the end of 1956, China completed the “socialist economic reforms,” turning all large- and medium-sized private enterprises into SOEs and small private enterprises into collectively-owned-enterprises. In 1958, the government took back the land previously allocated to farmers and established the people’s communes.Another economic reform started in 1978, allowing private enterprises to develop and allowing farmers to grow whatever they like on the land allocated to them. A modern tax system and a social insurance system were established and local governments have been given some fiscal freedom. However, there are still problems with public finance.
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