IMF Working Papers

Intergovernmental Fiscal Reform in China

By Philippe Wingender

April 13, 2018

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Philippe Wingender. Intergovernmental Fiscal Reform in China, (USA: International Monetary Fund, 2018) accessed December 21, 2024

Disclaimer: IMF Working Papers describe research in progress by the author(s) and are published to elicit comments and to encourage debate. The views expressed in IMF Working Papers are those of the author(s) and do not necessarily represent the views of the IMF, its Executive Board, or IMF management.

Summary

China is the most decentralized country in the world in terms of expenditures shares, with subnational governments responsible for 85 percent of government spending. Limited revenue autonomy and insufficient intergovernmental transfers have led to large unfunded mandates and a build-up of debt outside the budget. The government has recently announced an ambitious intergovernmental fiscal reform, which will increase the role of the central government. Comprehensive reform is needed to improve public service delivery, increase overall social spending levels and reduce regional disparities. Revenue reforms are also necessary to improve efficiency and reduce vulnerabilities from excessive subnational borrowing. These reforms are challenging, but are crucial so that the government can support China’s continued development and prosperity.

Subject: Expenditure, Fiscal policy, Labor, Public debt, Public employment, Revenue administration, Social assistance spending

Keywords: Authorities' definition, Budget cycle, Central government, China, Financing arrangement, Government, Government fund, Government health, Government structure, Government's plan, Intergovernmental relations, Local government, Local government resource envelope, Market value, Public employment, Purchase tax, Reform plan, Risk pooling, Social assistance spending, Social safety nets, Subnational government finances, Unemployment insurance, Unitary state, WP

Publication Details

  • Pages:

    32

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2018/088

  • Stock No:

    WPIEA2018088

  • ISBN:

    9781484351109

  • ISSN:

    1018-5941

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