Budget deficits in China: Calculations, causes, and impacts

Since China began its market-oriented economic reform in 1979, government budget deficits have been a fact of life. On one hand, the share of resources owned or controlled by the government must be shrunk in order to create a favorable environment for the development of the market economy. On the other hand, the government still performs many responsibilities required by the traditional planed economy. After calculating government budget deficits and analyzing their causes, the article assesses the impacts of goverment budget deficits and predicts the future of deficits in China.