In order to help it to tide over the Asian Financial crises and to expand domestic demand, the Chinese
government began to
carry out a positive fiscal policy in 1998, of which the main characteristics are the increase in deficits, in issue of national debts, and the expansion of public investment. Between 1998 and 2001, CND(RMB yuan)100 billion, 110 billion, 150 billion and 150 billion worth of long-term national savings bonds for construction were issued, totaling up to CND 510 billion, to be used to construct infrastructure and for discount interest for technical innovation. Although the
government stated initially that it was only a short-term policy adopted only under special circumstances, in 2002 it has decided to continue to follow this policy; as a result, it has been employed for 5 years and has turned out to be a mid-term one, tending towards a long-term policy. On that, there are two typical viewpoints both at home and abroad: some people, such as the scholars (2001) in the Research Institute of Macroeconomy under the State Development Planning Commission and Mr Yu Yongding(2000),hold that this policy should be continued, stressing on the role played by national debts in the growth of economy, because there is still much room , they say, to issue national bonds; the others, such as Lade(1999)and Ma Shuanyou(2001),emphasize on the bondage of the
dynamic rise of the burden rate of national debts, in the opinion that this policy possesses discontinuity and therefore should be timely and gradually scrapped. In this thesis I will evaluate the effect of this policy, analyze its dynamic steadiness and the dececive elements that determine its tendency , and point out that in the future the pattern of this active fiscal policy should be changed and its contents should be enriched.