Abstract: There is a significant long-term equilibrium relationship between fiscal revenue and fiscal expenditure in China. Local fiscal policy shows weak sustainability. The breakpoint position of fiscal revenue and expenditure in various regions indicates that China's tax-sharing reform has had a wide impact on local fiscal revenue and expenditure; China's fiscal revenue and expenditure relationship is in line with the "financial synchronization hypothesis", but the causal relationship between local fiscal revenues and expenditures in different regions still has large differences. Among the 30 regions in China, 13 regions are in line with the "Financial Synchronization Hypothesis", 10 regions are consistent with the "tax-expenditure hypothesis", 4 regions support the "expenditure-tax hypothesis", and 3 regions "institutional separation hypothesis" Established. Therefore, in order to maintain the sustainability of fiscal policy, different regional governments should adopt a differentiated strategy for fiscal imbalances to promote a long-term equilibrium of fiscal revenue and expenditure.

Key Words: Fiscal Policy; Fiscal Revenue; Fiscal Expenditure