Local leaders as board of directors
Updated: 2014-05-12 13:19
By Ed Zhang (China Daily)
|
|||||||||||
Sometimes, the things that most people talk about, though important, end up being irrelevant in a few years. The current discussions in media circles about Shanghai's pilot Free Trade Zone appear headed in this direction, much like the pilot financial reforms in Wenzhou, or the new investment zones elsewhere in China.
Of course, in the meantime, there are also those who cannot stop weeping over their losses from yet another decline of the A-share stock market without realizing that it has done so several times since the beginning of the year. There are also those who lament the dwindling visitors to the Canton Fair, the shopping window for China's exports. But come on, we have been living in the Internet age for some time, haven't we?
|
|
One thing to watch is China's new budget law. It has taken a whole decade for lawmakers to come up with an amendment to the almost 20-year-old law, which is out of tune with the realities of today's economy, considering that local governments are eager to take on increasing investment projects but don't have legitimate channels to raise capital on their own.
The existing budget law prohibits local governments from issuing bonds and raising debt. In a province with two dozen cities and 2 trillion yuan ($300 billion) in GDP, it would be unthinkable that local governments, at both provincial and city level, cannot finance their public projects directly through the financial market, although in reality many of them have raised a lot of debt (at least 1 trillion yuan and above) in various ways that are yet to be defined by law.
That makes the government system overly centralized and top-heavy. Local governments need to be more responsible for their financial affairs and for sponsoring development projects based on the needs of the local society.
The draft amendment allows local governments financial autonomy. If it were passed, it would be an unprecedented change in the nation's history.
Related Stories
Budget Law and local needs 2014-03-07 07:22
Chinese finance minister's to-do list 2014-03-07 17:39
China to maintain proactive fiscal, prudent monetary policies 2014-03-05 08:51
Local govts get more say in choice of financing tools 2014-03-06 07:18
Local government financing should be standardized 2014-01-07 22:04
Today's Top News
Armored team patrols Beijing's streets
Ukraine regions hold sovereignty vote
India, Pakistan troops exchange fires on Kashmir LoC
Panda base looks for caretakers
China, Kenya sign rail deal
Putin makes triumphal visit to Crimea
China better place to be a mom
Berlusconi starts community service
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
Variety is the spice of academic life |
Documents prove the truth can't be buried |
Race to remember story of resistance |
Strait talking: From enemy to friend |
Welcome to the world’s largest garbage dump |
The latest word on books: Keep those pages coming |