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    Local Public Finance Management in the People's Republic of China: Challenges and Opportunities
    Local Public Finance Management in the People's Republic of China: Challenges and Opportunities
    Local Public Finance Management in the People's Republic of China: Challenges and Opportunities
    Ebook139 pages1 hour

    Local Public Finance Management in the People's Republic of China: Challenges and Opportunities

    By Asian Development Bank

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    About this ebook

    The People's Republic of China is a highly decentralized unitary state with local governments having a dominant share of public service delivery responsibility. Local governance is critically linked to a local public finance system that creates incentives and accountability mechanisms. To ensure the policy response, this project focused on the three interrelated areas in local public finance management, i.e., local budgeting, local debt management and local taxation, and produced policy options in the short, medium and long terms. The overall purpose of the reforms is to improve local accountability and transparency, strengthen local fiscal capacity, and institutionalize formal frameworks for local public debt management.
    LanguageEnglish
    PublisherAsian Development Bank
    Release dateJul 1, 2014
    ISBN9789292545673
    Local Public Finance Management in the People's Republic of China: Challenges and Opportunities

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      Book preview

      Local Public Finance Management in the People's Republic of China - Asian Development Bank

      LOCAL PUBLIC FINANCE MANAGEMENT IN THE PEOPLE’S REPUBLIC OF CHINA

      CHALLENGES AND OPPORTUNITIES

      © 2014 Asian Development Bank

      All rights reserved. Published in 2014.

      Printed in the Philippines.

      ISBN 978-92-9254-566-6 (Print), 978-92-9254-567-3 (PDF)

      Publication Stock No. RPT146570-2

      Cataloging-in-Publication Data.

      Asian Development Bank.

      Local public finance management in the People’s Republic of China: Challenges and opportunities.

      Mandaluyong City, Philippines: Asian Development Bank, 2014.

      1. Fiscal administration.  2. Tax reforms.  3. Public finance.  4. Local finance.  I. Asian Development Bank.

      The views expressed in this publication are those of the authors and do not necessarily reflect the views and policies of the Asian Development Bank (ADB) or its Board of Governors or the governments they represent.

      ADB does not guarantee the accuracy of the data included in this publication and accepts no responsibility for any consequence of their use.

      By making any designation of or reference to a particular territory or geographic area, or by using the term country in this document, ADB does not intend to make any judgments as to the legal or other status of any territory or area.

      ADB encourages printing or copying information exclusively for personal and noncommercial use with proper acknowledgment of ADB. Users are restricted from reselling, redistributing, or creating derivative works for commercial purposes without the express, written consent of ADB.

      Note:

      In this publication, $ refers to US dollars.

      6 ADB Avenue, Mandaluyong City

      1550 Metro Manila, Philippines

      Tel +63 2 632 4444

      Fax +63 2 636 2444

      www.adb.org

      For orders, please contact:

      Public Information Center

      Fax +63 2 636 2584

      [email protected]

      Contents

      Tables, Figures, and Boxes

      Foreword

      The People’s Republic of China (PRC) has a long history of recognizing good local governance as a catalyst for economic growth and to improve local economies and social outcomes. Local governments in PRC have had a stellar record of delivering growth and reducing poverty. These achievements, however, came at the lack of attention to fiscal transparency in budgeting; fiscal responsibility in borrowing; and underprovision of public goods such as environmental protection, orderly urban growth, and social inclusion.

      This report grew out of an Asian Development Bank (ADB)-financed technical assistance project to ensure an adequate policy response to local public finance management and to achieve medium-term fiscal reforms in PRC. It analyzes the bottlenecks in local public finance management by focusing on local budgeting, debt management and taxation, and suggestions for policy options.

      Local budgeting, debt management, and taxation have important bearings on local public finance management. Linking local budgeting with fiscal planning and medium-term priorities is key for accountability, whereas comprehensiveness in budgeting and its execution is vital for transparency. Strengthening local fiscal capacity is also necessary to balance spending powers with expenditure responsibility. To meet local investment needs with fiscal discipline, local borrowing needs to be formalized by institutionalizing ex-ante and ex-post regulatory frameworks.

      ADB will continue to support the government’s initiatives since it believes that the adaption of the policy options proposed will ensure effective local public finance management for the continued inclusive growth of PRC, overcoming fiscal risks. Also, ADB is pleased to have contributed to PRC’s efforts in strengthening the fiscal management capacity of its local governments. Through this report, ADB hopes to contribute to a better understanding of the current reform status and an agenda for future reform options in local public finance management and their impacts on the economy.

      Ayumi Konishi

      Director General

      East Asia Department

      Asian Development Bank

      Foreword

      The reform of fiscal and taxation systems is one of the key priorities in the People’s Republic of China (PRC). Over the past 30 years, the PRC has taken incremental reform in fiscal and taxation systems to adapt to its economic development. It has significantly contributed to the economic growth and accumulated valuable experience for the subsequent reform in fiscal and taxation systems in the PRC.

      After 30 years of rapid economic growth, the PRC now faces challenges in economic transformation and sustainable development. To address the challenge, the PRC needs to make continued efforts to further improve its fiscal and taxation systems, while drawing upon international experience and building on its own successful practice in the past. The fiscal and taxation systems

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