ABSTRACT
Fiscal policy relates to the government’s taxing, spending, investing, lending, and social welfare, as well as redistribution activities, and how these activities affect a country’s economic performance. In China, the Ministry of Finance (MOF), the National Development and Reform Commission (NDRC), and, of course, the State Council all play important but different roles in managing fiscal policy.1 In the United States, the U.S. Treasury is primarily responsible for fiscal policy. In both economies, local governments have a significant role in how fiscal policy is implemented. In any economy, investors (capitalists), suppliers of labor, and the institution that we know as “the government” are the three critical stakeholders in the production process. There are substantial differences between China and the United States in terms of the government stakeholder’s role in production, investment, and claims on income (taxation), as we shall see.
