Beijing seeks to end abuse of local government procurement process
26th May 2017
• This measure, along with other similar actions, are to prevent intrepid and obstinate local officials from circumventing fiscal reforms. • In this...
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FISCAL
FISCAL
Central government aims to eliminate illegal local government borrowing
26th April 2017
• All key economic and finance agencies will jointly tackle illicit local government borrowing, particularly through the local government financing...
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Setting of debt ceiling becomes more flexible
23rd March 2017
• Provinces involved in strategic initiatives, such as the “Belt and Road,” can take on more debt. • No region is allowed to have significantly higher...
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Central government outlines actions to avoid local fiscal crises
14th November 2016
• Central government will provide temporary loan when a provincial government defaults. • Provincial governments will ultimately be held responsible...
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Beijing further clarifies how to manage local government debt
9th November 2016
• Local governments should not use general purpose debt to finance its normal operations. • Local governments cannot issue bonds for interest...
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Rejiggering local government responsibility to improve fiscal governance
24th August 2016
• The center will further empower local governments over local issues. • Federal versus local-level authority and responsibilities will be better...
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Resource tax reform accelerates, covering metals and minerals
9th May 2016
• For most commodities, the resource tax will change from volume-based to price-based (ad valorem). • Scope of tax will be further expanded to other...
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Resource tax initiated in Hebei province to encourage water conservation
9th May 2016
• Water resource fees will be replaced by a tax on the volume of water consumption. • Tax rate will be progressive to encourage conservation and...
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China replaces business tax with value-added tax
30th April 2016
• Compared to a business tax, the value-added tax (VAT) makes tax evasion more difficult. • The switch to a VAT is equivalent to a tax cut for many...
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Local governments are instructed to refinance their existing debt
21st December 2015
• All local governments will be subject to a debt ceiling. • All local governments’ contingent liabilities will be scrutinized to determine what...
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Managing public-private projects gets more concrete details
25th April 2015
• Beijing will provide favorable financing terms for public-private partnership (PPP) projects. • Local governments need to ensure that there are no...
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New details on issuing specific purpose bonds
2nd April 2015
• Bond repayment will come from corresponding state managed funds and cash flow from projects that received funding.
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A first step toward a credible local bond market
12th March 2015
• Local government bond interest rate will be partially market-determined. • Bonds will be tax exempt and yields will track sovereign bond yields.
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To ease fiscal burdens, pension plan for civil servants will be reformed
14th January 2015
• Civil servants will be required to contribute to their pension plan to reduce state’s fiscal burden. • Pension benefits will become less generous...
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Beijing improves fiscal transfer system’s structure
27th December 2014
• Part of fiscal reforms requires more clearly defining and delineating respective fiscal burdens between central and local governments. • Poorer...
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Local preferential policies are scrapped
9th December 2014
• The power to formulate tax incentives and other preferential policies has been centralized. • Local governments are not allowed to exempt companies...
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Local debt reform launched to contain growing risks
2nd October 2014
• Local governments’ existing debt will be refinanced through issuing new bonds. • Central government will not bail out any lower-level government in...
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Central government takes opening shot in complex fiscal reforms
31st August 2014
• Effective in 2015, provincial governments will be allowed to issue bonds for the first time, which is the only way to finance their budget deficit....
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Government procurement of public services will expand
26th September 2013
• More public services will be outsourced to private and non-government organizations. • A government procurement system for services will be created...
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