Fiscal strategies
Linda Yueh, adjunct professor of economics at the London Business School
Give local governments greater tax-raising powers.
Resist the temptation to boost the real estate market just to revive the failing model of local government land sales revenues.
Duncan Innes-Ker, regional editor, Asia, of The Economist Intelligence Unit
Urgent need for greater transparency about true fiscal position.
Bonds are only a transitional solution to local government financing with local taxes urgently need.
Ambrose Evans-Pritchard, international business editor of the Daily Telegraph
The government is handling a difficult situation well in attempting to rein in debt.
The fundamental dynamism of the economy may be enough to stave off a fiscal crisis, although the steep rise in debt over the past five years triggers alarm.
Liu Zhiqin, senior fellow of the Chongyang Institute for Financial Studies at Renmin University of China
Fiscal deficit cannot be solved by austerity measures.
Investment in healthcare, education and social security will boost the economy and resolve fiscal problems in the long term.
Zhu Ning, deputy director of the Shanghai Advanced Institute of Finance
Making local governments fiscally responsible will be difficult while the central government is prepared to bail out profligate spenders.
The risk is not of bust but of a permanent fiscal drag hampering growth.
Louis Kuijs, chief China economist of Royal Bank of Scotland
Local government investment activity needs to be on the books and not just buried away in arms-length LGFVs.
The government needs to realize that fiscal revenues will fall as growth slows and cut expenditure, particularly if it gives local government more autonomy.
Gary Liu, deputy director of CEIBS Lujiazui International Finance Research Center
Both local and central governments need to prevent the housing market collapsing.
Local governments need to stop wasting money on unnecessary building projects and infrastructure.
(China Daily Africa Weekly 03/27/2015 page7)
