ABSTRACT
Economic growth is a major goal of many countries, including China. Taxation income is more sensitive to price influences than to economic growth. Based on 1998’s economic development trend, the achievement of the planned economic growth and taxation income targets is possible; but it will require very hard work. Major factors include weaknesses in the three major engines of economic growth, namely investment, consumption, and net exports. The key issues are the improvement of enterprise management, raising the contribution of technological advances to economic growth, and changing the investment-driven growth model. With the country’s economy in the process of changing economic tracks, taxation-based fiscal revenue and participation in the macroeconomic adjustment should be given equal emphasis. Problems that appear in the economy must be addressed case by case and solved in a specific way. Deflation is an inevitable stage in the economic adjustment demanded by the process of track alteration.
