Dialogue program on current developments concerning the financial constitutional law in Germany and China

Event: Society and Politics

The unbalanced revenue and expenditure distribution between the central and the provincial governments and the inefficient tax system serve as an example for the necessity of reforms of the Chinese financial constitutional law.  The central problem concerning the unbalanced revenues is that the local level governments have to shoulder most of the expenditures, while the central government receives 50% of the overall tax revenues and is only responsible for one fourth of public expenditures. This inefficiency leads to the fact that on the local level some basic public services cannot be offered adequately.

Germany on the other hand is equipped with a rather efficient financial constitution, which clearly defines the competences of the different stakeholders (federal, state and local level). The financial constitution also precisely differentiates the distribution of tax revenues between the different levels and therefore enables the establishment of rather homogenous living standards of the different parts of the country. 

The above-described Chinese circumstances have already profoundly been analyzed from an economic point of view. However, an in-depth analysis from a legal perspective is lacking. Hence, the aim of the program from April 25th – April 29th 2016 in Berlin and Karlsruhe was to inform Chinese legal experts about the German experiences of implementing an efficient financial constitution and try to find out in what regard these can be applied to China.

For this purpose the Chinese delegation headed by Prof. Dr. Li Shuzhong, Vice President of the China University of Political Science and Law (CUPL), met with leading practitioners and academic experts on the German financial constitution.

During their talks with academics, the delegation e.g. discussed the general regulations of the German financial constitution, how conflicts between different stakeholders are solved and the restructuring of the fiscal equalization scheme of the German states (Länderfinanzausgleich).

With politicians, decision makers and other practitioners the delegation debated on the practical implementation e.g. by means of institutions like the financial committee (Finanzausschuss) of the German Bundestag of the financial constitution. All discussions also took into account the impact of developments like the global financial crisis, the European debt crisis or the recent refugee crisis on the financial constitution.

The program concluded with a visit of the German Federal Constitutional Court in Karlsruhe and a meeting with Prof. Dr. Reinhard Gaier, Judge at the Federal Constitutional Court, on April 29th.

Go back