INNOVATIONS IN THE SUSTAINABLE MANAGEMENT OF LOCAL GOVERNMENT LIABILITIES IN CHINA

2018 ◽  
Vol 63 (04) ◽  
pp. 819-837
Author(s):  
JINCHUAN SHI ◽  
ZHIKAI WANG ◽  
XIAOJIANG WANG
Keyword(s):  
Economic Development ◽  
Local Government ◽  
Local Governments ◽  
Sustainable Management ◽  
Gain Control ◽  
Government Debt ◽  
Bond Market ◽  
Sustainable Growth ◽  
Second Year

Through the first and second year of China’s 13th five-year plan coincided with local governments holding their own “Two Sessions” before attending the “Two Congresses” in Beijing in March. As one of the frequent results, the issue of local government debt naturally became a popular topic. The scale of local government debt in China was/is considerable, and the structure is complex, which poses a threat to sustained economic development. To address this situation, China must regulate local government debt, clean up urban financing vehicle debt, foster and manage the local bond market, and introduce innovation in the management of local government liability. Only through initiatives such as this will China gain control of local government debt and thus support and promote the long-term sustainable growth of the economy.

scholarly journals Developing by borrowing? Inter-jurisdictional competition, land finance and local debt accumulation in China

Urban Studies ◽  
2016 ◽  
Vol 54 (4) ◽  
pp. 897-916 ◽  
Author(s):  
Fenghua Pan ◽  
Fengmei Zhang ◽  
Shengjun Zhu ◽  
Dariusz Wójcik
Keyword(s):  
Local Government ◽  
Local Governments ◽  
Financial Stability ◽  
Temporal Dynamics ◽  
Government Debt ◽  
Debt Accumulation ◽  
Spatial And Temporal Dynamics ◽  
National Economic ◽  
Jurisdictional Competition

Although the investment-oriented development model for economic growth adopted by Chinese governments has generated spectacular results, the risks of debt-financed urbanisation and economic development have recently become evident in mounting local debts that are undermining the financial system, triggering concerns with respect to local governments’ indebtedness, financial stability and sovereign risk in China. In this paper, we portray the uneven spatial and temporal dynamics of local government debt in China, and examine the ways in which it is intertwined with institutional, political and economic factors. Our analysis shows that while global and national economic conditions have resulted in a dramatic increase in local government debt, particularly in the late 2000s and the early 2010s, the spatial variation of local debt accumulation in China could be partly explained by two institutional factors: land finance and inter-jurisdictional competition. We argue that the behaviour of local governments may harm the long-term future of Chinese cities.

scholarly journals Has Local Government Debt Promoted Economic Growth in developing countries? New evidence from a survey in China

2021 ◽  
Vol 235 ◽  
pp. 01014
Author(s):  
Tao Wu ◽  
Peng Zhong ◽  
Lingyue Wu
Keyword(s):  
Economic Growth ◽  
Developing Countries ◽  
Local Government ◽  
Local Governments ◽  
Bond Market ◽  
Smooth Transition ◽  
Government Bond ◽  
Open Market ◽  
Government Investment ◽  
Smooth Transition Regression

Based on the panel smooth transition regression (PSTR) model, this paper empirically analyzes the relationship between Chinese local government’s bond financing and economic growth, with the quarterly panel data of bonds issued by local governments and their investment and financing platform companies in the open market from 2008 to 2018 as samples. The research shows that there is a gradual non-linear relationship between local government bond market financing and economic growth in China. With the increase of the scale of local government bond market financing in China, the effect of bond market financing on economic growth will gradually decline and have a negative effect. This result means that for developing countries like China, it is not advisable to rely solely on government investment to drive economic growth.

Eurozonization of the Chinese Economy: How Do Intergovernmental Transfers Affect Local Government Debt in China?

2018 ◽  
Vol 17 (1) ◽  
pp. 1-18 ◽  
Author(s):  
Ming Lu ◽  
Huiyong Zhong
Keyword(s):  
Local Government ◽  
Government Debt ◽  
Chinese Economy ◽  
Fiscal Sustainability ◽  
Intergovernmental Transfers ◽  
Fiscal Transfers ◽  
Coastal Cities ◽  
Government Financing ◽  
Per Capita

China's local government debt has risen dramatically bringing risks to China's fiscal sustainability and long term economic growth. Using urban construction investment bonds (UCIBs) issued by local government financing vehicles (LGFVs), we study how intergovernmental fiscal transfers impact the issuance of UCIBs under China's unitary currency system. Applying instrumental variable estimation, we find that special-purpose fiscal transfers per capita are positively associated with the issuance of UCIBs. A one-RMB increase in special-purpose fiscal transfers per capita is associated with an increase in the issuance of UCIBs per capita of 0.282 RMB, whereas regular fiscal transfers (including tax rebates and general fiscal transfers) do not affect the issuance of UCIBs. Furthermore, the effect of special-purpose fiscal transfers on the issuance of UCIBs mainly exists in inland cities rather than coastal cities. This imposes risks of “eurozonization” for the Chinese economy. We also find a deterioration of refinancing in terms of issuing more UCIBs.

scholarly journals Local Government Debt and Municipal Bonds in China: Problems and a Framework of Rules

2014 ◽  
Vol 31 (2) ◽  
pp. 23-53 ◽  
Author(s):  
Xingyuan Feng
Keyword(s):  
Public Finance ◽  
Local Government ◽  
Local Governments ◽  
Government Debt ◽  
Debt Financing ◽  
Municipal Bonds ◽  
Local Democracy ◽  
Government Bonds ◽  
Fiscal Transparency ◽  
Current State

Local governments in China are facing heavy debt burdens, a low level of fiscal transparency and a lack of constraints by local democracy. Since 2008, local government debts have skyrocketed. This article analyses the current state and features of local government debts and the two kinds of 'quasi municipal bonds' in China—urban investment bonds and local government bonds—along with their problems and risks. It examines the risks connected with local government debts and these bonds from the perspectives of public finance and political economy. It concludes with a discussion of a framework of rules for local government debt financing, especially for the issuance of municipal bonds in China.

China local government debt risk survives reforms

2018 ◽  
Keyword(s):  
Local Government ◽  
Financial Stability ◽  
Central Government ◽  
Arable Land ◽  
Government Debt ◽  
Bond Market ◽  
Municipal Bonds ◽  
Content Type ◽  
Land Prices ◽  
Near Future

Subject Local government debt in China. Significance China in 2015 introduced municipal bonds and launched a debt-swap programme to address the risks that opaque and fast-growing local government debt posed to financial stability. Three years on, the new policy shows signs of old problems. Impacts The authorities will intervene in potential local bond defaults to prevent panic; concerns of moral hazard are secondary for now. The supply of arable land will gradually erode, endangering food security. The central government will retain issuance quotas that prevent the local bond market becoming fully autonomous in the near future. The authorities in cities with high land prices (mostly in China's east) will be at an advantage.

Business Incentive Controls and Political Bargaining: Performance Agreements and Clawback Clauses in American Cities

2013 ◽  
Vol 28 (3) ◽  
pp. 1-28
Author(s):  
Ha Jyun Sang
Keyword(s):  
Economic Development ◽  
Local Government ◽  
Local Governments ◽  
Bargaining Model ◽  
Business Sector ◽  
Political Bargaining ◽  
Private Organizations ◽  
Development Incentives ◽  
American Cities ◽  
Bargaining Approach

This study examines factors that influence the use of performance agreements with clawback clauses as a means of controlling economic development incentives. The author advances a bargaining model based on networks as a lens for understanding development subsidies and controls. While a financially weak local government and local governments that primarily interact with private organizations tend to more loosely implement performance agreements and clawback clauses, local governments in areas with a business sector dominated by large companies and local governments that interact with public organizations tend to more strictly apply them. Another interesting finding is that bargaining conditions based on network relationships play an important role in the decisionto always implement performance agreements with clawback clauses and thatpoor bargaining conditions result in local governments negotiating less bindingarrangements. The results verify the utility of a bargaining approach and suggestthat local governments can help to encourage more accountable and cost-efficienteconomic development by carefully managing bargaining conditions and networks.

Local Self-Government in Central and Eastern Europe: Decentralization or Deconcentration?

1997 ◽  
Vol 15 (2) ◽  
pp. 177-186 ◽  
Author(s):  
K Zsamboki ◽  
M Bell
Keyword(s):  
Soviet Union ◽  
Local Government ◽  
Eastern Europe ◽  
Local Governments ◽  
Former Soviet Union ◽  
Central And Eastern Europe ◽  
Transition Process ◽  
Independent States ◽  
Newly Independent States

The development of autonomous local self-governments is a critical, albeit often over-looked, element of the long-term transition to democracy in Central and Eastern Europe and the newly independent states of the former Soviet Union. All countries in the region have taken clear steps to pass legislation creating new local government institutions. Such institutional reform is necessary, but not sufficient, for the development of autonomous local self-government. In this paper we present several fundamental criteria which must be satisfied in order to establish and nurture autonomous local self-government. We test these criteria against institutional reforms in Central and Eastern Europe and the newly independent states to gauge the extent to which there has been actual devolution of governmental responsibility from central to local governments. We conclude that, although some individual strands of these fundamental reforms may have received some attention in the current transition process, such attention is more ad hoc than strategic. As a result, the goal of creating autonomous local self-governments has not been achieved. Donor nations and reform elements in each country must think strategically about all dimensions of this local government transition if these changes are to be institutionalized and the transition is to be successful in the long term.

scholarly journals Developmental Local Government as a Model for Grassroots Socio-Economic Development in Nigeria

1970 ◽  
Vol 4 (2) ◽  
pp. 42-61
Author(s):  
C Okafor ◽  
EEO Chukwuemeka ◽  
JO Udenta
Keyword(s):  
Economic Development ◽  
Local Government ◽  
Local Governments ◽  
Local Population ◽  
The State ◽  
Present System ◽  
State Governments ◽  
Economic Activities ◽  
The Third ◽  
Socio Economic Development

In the past five decades of political independence in Nigeria, local government administration has moved from the colonial styled Local administration characterized by peculiar systems to the federating units to the present unified and standardized system that constitutionally recognizes local government as the third tier of government. As the third tier of government, local governments are entitled to a statutory allocation of national revenue and the carrying out of specific functions in response to local needs. The objective of the problem statement of this article is to show that the present system whereby, the Constitution gives the State governments the power to handle issues of organization and responsibility in the local governments places a strong limitation on local autonomy and governance at the local level. The abuse of these provisions in the Constitution by the State governments coupled with other issues such as low level of commitment to the people and lack of monitoring and evaluation are negatively affecting grassroots socio-economic development in the Country. Local economic growth and development is an imperative for overall socio-economic development of the Country (the local population presently faces high incidence of poverty, unemployment, lack of social infrastructure and low economic activities). It is in this context that the article prescribes a developmental local government model which has local economic development (LED) as ‘the mandate’ to address the concerns of poverty, unemployment and inadequate resources in the rural areas. The LED approach enables local governments to stimulate economic activities and improve the socioeconomic conditions of people in the localities by working in partnership with private and other non-governmental sectors.

scholarly journals Nautical Tourism and Small Shipbuilding as Significant part of Blue Economy Development

2019 ◽  
Vol 57 (1) ◽  
pp. 97-110
Author(s):  
Alen Alempijević ◽  
Mirjana Kovačić
Keyword(s):  
Economic Development ◽  
Local Community ◽  
Sustainable Growth ◽  
Significant Part ◽  
Maritime Industry ◽  
Business Opportunities ◽  
Blue Economy ◽  
Two Sectors ◽  
The Eu

Nautical tourism is one of the major tourism sectors and the largest growing maritime industry in Europe, employing almost 3.2 million people. Nautical tourism is of great importance for Croatia and Croatia is increasingly promoted as one of the leading Mediterranean nautical destinations. Croatia’s insular and coastal nautical infrastructure offers its users adequate services, but services need to be continuously upgraded. At the same time, the development of the local community must not be subordinated to the development of a nautical destination. The authors analyze nautical tourism and small shipbuilding, two sectors that constitute the blue economy. The blue economy is analyzed with particular regard as a long-term strategy to support the sustainable growth of the marine and maritime sectors. The authors emphasize that the blue economy aims to stimulate sustainable economic development, create business opportunities and open jobs in the blue economy sectors of the EU countries. The importance of the blue economy for Croatia is analyzed and the results of the analysis presented.

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