Abstract: During the“14th Five-Year Plan”period, China is faced with great changes unseen for centuries, the safe operation of its finance is also faced with the risks and challenges from the following four aspects. The first is the“middle income trap”and the“high-income wall”, i.e., the issue of sustainable fiscal and economic development, which lies on the new journey of China’s socialist modernization after China has entered a new stage of development. The second is the digital economy and digital aristocracy that endanger China’s fiscal absorbing capacity and macroeconomic regulation of borders. The third is the awareness of the fiscal risks in the process of fiscal management. The fourth is the shrinking of traditional tax bases and the relative increasing of taxpayers’ tax burdens during the process of China’s economic transformation and upgrading and after the improvement of the level of economic globalization; the issues of the insufficient regulation and control and the weak adjustment faced with the newly emerged tax bases, and the need for the transition of the consumption tax from the“pollution suppression type”to the“healthy lifestyle promotion type”are typical examples in this regard. These problems may cause China’s fiscal development to face the risks of “dimensional reduction hit”, which is unforeseeable and difficult to overcome by China’s traditional fiscal development mode; therefore, it should be given severe attention. Thus, it is suggested for the government to adopt countermeasures from the following five aspects: firstly, to actively respond to the“risk costs”brought about by the uncertainty of the new development and encourage innovation by fiscal incentive means, so as to achieve the transformation of economic development powers; secondly, to innovate the digitalized tax collection mode and construct a tax system to accommodate the digital economy; thirdly, to let loose the population policy of family planning as soon as possible, so as to eliminate the hidden dangers of the strategic development; fourthly, to promote the transformation of consumption tax and build a modern green tax system; lastly, to perfect the fiscal response mechanism for emergency to prevent instantaneous shock risks.

Key words: financial security, financial risks, emergency fiscal mechanism, dimension reduction blow, digital economy