Fiscal reform driven by public risk prevention

The Third Plenary Session of the 18th Central Committee of the Communist Party of China pointed out that public finance is the basis and important pillar of national governance. Public finance is not only an economic issue, but also a political issue, a legal issue and a public administration issue.

The impetus for reform is public risk. Over the past four decades we have experienced three major public risks. At the beginning of reform and opening-up, we faced the existential risk of poverty. At that time China's poverty incidence was as high as 90 percent, and the country's fiscal power was not strong enough.

Afterward we made the economic cake bigger, but the opportunities available in urban and rural areas and among various social income groups and different regions were unequal.