On Government Role and Fiscal Policy under Market-Economy System

Economic society consists of two parts: government and market. Under Market Economy system, market can play basic role. Meanwhile, there are drawbacks and failures. For the government, the main duty is to create and maintain an ideal external environment in which market economy can operate efficiently and smoothly. Government must play fairly and efficiently its roles including supply of public goods, allocation of resources, re distribution of national revenue, stabilization of society and economy. There are some different market economy patterns in different countries and different times. At present, the role of Chinese government is special because of its history, size of population and land, level of economy development. Public finance is economic base and physical reserve, and it must be unified, authoritative, foresight. China must reform its administration institutes and fiscal system according to normal market economy, so as to solve problems in social economy, to make social economy develop healthily.