Xiamen University

WISE-SOE.
NOAH ISSA PHILIP BENJAMIN- ID: 15220171155809

Chinese taxation system Assignment 1

1. What can you get from the data of the Chinese population?

In 2007 the china’s population was 1.4 billion, which gave room to china to be the
world’s leading population in the world. The world population approximately 7.6
billion and in which china is 20 percent of the world population. Over the few
decades china from 1979 china introduced one-child policy, which was effective from
1980s. This was introduced to wider the economic reform but in 2016 due to
imbalances between aging population of the young people over the elderly people,
Chinese government changed the policy to having two children per family.
China's large population is undoubtedly the primary factor in causing these following
problems and contradictions.
 An unbalanced development has appeared in China for a long time. Economic
disparities between different regions are increasing. China's GDP stands at a
high point in the world, but the amount on average still stays at a low level.
Besides, an aging population has already affected the society. Stress on
welfare becomes greater because of large expense on pension benefits and
medical security. As a result, outlay on national defense budget will be
influentially reduced.
 In the second place, most environmental problems are closely associated with
a large population. Chinese need huge requirements on food, accommodation
and resources. Thus, trees are cut down and rivers are filled up with soil for
farmlands and houses. People get water, coal, metal and other natural
resources from underground, mountains and sea. Foul water, exhaust gas and
waste solid deeply destroy China's natural environment. As time goes on, we
will continue to see how the environmental degradation impacts our country if
we don't change the way we live. Because of the large population, it's really a
tough work to accomplish environmental governance. Everyone should take
action to protect the natural world.
 Last but not least, the large population affects every person's daily life, even
the livelihood. First, traffic is susceptible to congestion. Private cars easily get
suck in traffic block for long at rush hour. Public transportation such as trains,
buses and subways gets increasing crowded. For example in public
universities for the case of Xiamen the number of national students are high
more especially the female students, there are congestions in public places like
toilets, canteens are so difficulty to enter because we have to follow line and
will queue for long to serve for food and to enter toilet. The worst thing is that
many people can't afford the high costs today. Housing and commodity prices
become prohibitive in cities, which leaves citizens breathless with stress.
It is clear that the population is rising at a rate, which is fairly alarming.
Overpopulation is the most important factor that impairs China's economic and social
development. Therefor, the measures of population control should be taken as
priority. With efforts made by the whole nation and the international cooperation,
China's population and development are surely going forward to a new stage.

2. Does large population result in good economy of the country? Give

your reason for it.
It was stated by Thomas Malthus that population growth would depress living
standards in the long run. That means population growth has negative impact on the
economy of the country based on the following reasons. For instance India is one of
over populated country in the world.
 It is noticed that there is a fixed quantity of land; if we have high population,
the population growth will eventually reduce the amount of resources that
each individual can consume, ultimately resulting in disease, starvation, and
war.
 The general view of economists was that high birth rates and rapid population
growth in poor countries would divert scarce capital away from savings and
investment, thereby placing a drag on economic development.
 A population’s age composition matters for economic growth When fertility
rates decline over a sustained period of time the proportion of the working age
population (i.e. over 15) grows relative to the economically dependent youth
population. This change in age composition creates a window of opportunity
during which a country can potentially raise its level of savings and
investment—a phenomenon now known as the demographic dividend.

The below listed items are also describing how large the population is, although is
increase in production level but still there is a decrease in per capita food availability.
 Poor distribution of food resulting to hunger and deaths.
 Shortage in medical facilities and services.
 Problems with power shortage and distribution.
 Lack of educational facilities and services.
 Increased government debts.
 Rising inflation.
 Less employment opportunities.
 More number of illiterates.
 Difficulties in the implementation of state development programs.
 Increased instances of crime.
 Water shortage.
 Increase in industrial and community waste.
 Air, water and land pollution.
 Increased density of population.
Those above describe how large the population the country has, those effects will
actual will be seen in the country.
 3. How do you think of the fast growth of the Chinese GDP?
 First of all, China is ruled by the Chinese Communist Party, which
controls the state. Because of this, it has absolute control of many key
resources, especially land. China’s mass production also played a key
role in China's unification.
 And the second major change, which has taken place, now is that mass-
produced Chinese goods are now exported all over the world. This gave
china to have a fast growing GDP in the world.
There are many factors that lead to the growth of Chinese GDP but I only
used this two major sources.

4. Check the history of GDP in your country and give some basic
description of it?
The gross domestic product (GDP) is the measure of national income and output for a
given country's economy. Gross domestic product (GDP) is equal to the total
expenditures for all final goods and services produced within the country in a given
period of time. South Sudan as a newly country in the world, it had gained her
independence in July 9th.2011. Due to it’s being new to the world; its GDP was not all
that up to date good compared to other countries. In 2008 before it could separate
from Sudan, GDP was 13.41 USD Billion and in 2011 the Gross Domestic Product
(GDP) of South Sudan was worth 17.83 billion US dollars. Much more better than
2008 and that was after independence. In 2015 the South Sudan GDP declined to 9.02
US dollars, which represents only 0.01 percent of the world economy. While China’s
GDP was 11199.15 in 2016.

5. Why the government can’t do everything?

Government can’t provide everything because of the following cases and depends on
the type of the government.
 Bureaucracies always have a certain degree of inefficiency, and the larger it
gets, the more pronounced it becomes. About 40% of the GDP of the Soviet
Union was lost to corruption, and the percentage would no doubt be greater in
a similar system in the United States, where our economy is ten times the
size.
 Every economic system has to decide how to allocate productive resources.
Capitalism does the via a price mechanism, which happens without any central
input. Socialism, on the other hand, typically has a command economy, where
leaders tell factories what to produce. This could theoretically work, but in
practice the government produces what it thinks the people need, rather than
what they want. This produces a black market to satisfy remaining wants,
which strengths productive resources from the legitimate market.
 Lastly, Socialism relies on good intentions. It really requires a great sense of
civic duty to work at all, let alone work perfectly. However, people rarely
have this attitude towards government, and corruption and nepotism sets in.
Capitalism also has this problem, but it works whether people are rotten to the
core. Socialist/Capitalist countries like the Nordic Model have worked well, so
socialism isn't entirely worthless, but pure socialism has for the most part
failed spectacularly. Especially with our culture, it wouldn't fit or be accepted.
 6. What is the role of the government in real economy?
Every government in different countries in the world has steps to help the economy
achieve the goals of growth and provide full employment and also stable the market
prices. For instance in the United States, the government influences economic activity
through two approaches: monetary policy and fiscal policy. Through monetary policy,
the government exerts its power to regulate the money supply and level of interest
rates. Through fiscal policy, it uses its power to tax and to spend. Below are some of
the roles of the government in the real economy;

Monetary Policy
 Monetary policy is used to control the money supply and interest rates.
 It’s exercised through an independent government agency called the Federal
Reserve System (“the Fed”), which has the power to control the money supply
and interest rates.
 When the Fed believes that inflation is a problem, it will use contractionary
policy to decrease the money supply and raise interest rates. To counter a
recession, it will use expansionary policy to increase the money supply and
reduce interest rates.

Fiscal Policy
 Fiscal policy uses the government’s power to spend and tax.
 When the country is in a recession, the government will increase spending,
reduce taxes, or do both to expand the economy.
 When we’re experiencing inflation, the government will decrease spending or
increase taxes, or both.
 When the government takes in more money in a given year through taxes) than it
spends, the result is a surplus.
 When the opposite happens—government spends more money than it takes in—
we have a deficit.
 The cumulative sum of deficits is the national debt the total amount of money
owed by the federal government.

Government has many roles in the real economy, while I am focusing here on the
role of government, it is important to understand that the private sector has a much
larger and even more important role to play in the transition real economy. It is the
private sector that produces the goods and services that modern life relies on.
I am saying that in a complex economy on a crowded planet, we need a set of rules
that respond to the complexity and planetary stress that our global economy has
created. we need rules to ensure that economic life does not destroy the planet that
provides us with food, air and water.
 Funding basic science needed for renewable energy and renewable
resource technology.
  Using the tax system, government purchasing power and other
financial tools to steer private capital toward investment in renewable
energy and other sustainability technologies and businesses.
 Investment in sustainability infrastructure, such as smart grids, electric
vehicle charging stations, mass transit, waste management facilities,
water filtration systems and sewage treatment systems.
 Regulating land use and other private behaviors to minimize
destruction of ecosystems.
 Working with private organizations as well as state and local
government to ensure that the transition is well managed in the real
world.
 Measuring our society’s progress toward sustainability by developing
and maintaining a system of generally accepted sustainability metrics.
This in turn should facilitate the integration of sustainability into our
overall management of the economy along with the setting of national
sustainable economic policy.
 Transferring sustainability technologies to the developing world.

7. Give a basic description of the fiscal system in your country?

Definition of fiscal policy or system.

Fiscal system is the complete structure of government revenue and expenditures and
the framework within which its agencies collect and disburse those funds. South
Sudan became the world's 196th country on 9 July 2011. Despite, South Sudan is
new, it has all-too-familiar needs. With South Sudan poised to grow and develop
economically, it has adopted a tax system that is conducive to its needs and goals,
one, which raises sufficient revenue without discouraging vital domestic
entrepreneurship and inward investment.

South Sudan fiscal policy consists of the following forms, and how they are used in
the country.

 Income tax rates for individuals are fairly flat and low by international norms:
0 per cent for the first 300 Sudanese Pounds (SDG), 10 per cent for SDG 301-
5,000 and 15 per cent for SDG 5,001 and above.
 Business profit tax rates are set at 10 per cent for small businesses and 15 per
cent for medium-sized businesses. Expenses are generally deductible provided
that they are wholly and exclusively incurred for the purpose of the business.
 Expenses on capital assets can be recovered via depreciation deductions. The
depreciation schedule is refreshingly simple, with only three categories:
buildings and other structures (10 years), vehicles, office equipment and
computers (three years); and all other property (four years). Expenses on
intellectual property are deductible over the useful life of the property.
 Business losses can be carried forward up to five years and are available as a
deduction against any income.
 There is no separate capital gains tax: instead capital gains are treated as
business incomes and capital losses as business losses.
South Sudan as new country in the world most of the data is not online readily to be
used but the few I gathered actual represents the south Sudan data.

8. If the income distribution rule is 30/70. Calculate the corresponding

Gini coefficient.