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Author: Yinqiu Lu
Publisher: International Monetary Fund
ISBN: 1475536933
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
China’s rapid credit expansion in 2009–10 brought local government financing platforms (LGFPs) into the spotlight. This paper discusses their function, reasons behind their recent expansion, and risks they are posing to the financial sector, local governments, and sovereign balance sheet. This paper argues that LGFPs were a fortune for China in the past, but would turn out to be a misfortune if the causes of the rapid expansion of LGFPs are not addressed promptly. In this context, the paper proposes ways to avoid misfortune by: acknowledging and addressing the revenue and expenditure mismatches at the local government level; establishing a comprehensive framework to regulate and supervise local government budgets; ensuring the sustainability of the financial resources obtained from the sale of land use rights; and developing local government bond markets and promoting financial reforms.
Author: Yinqiu Lu
Publisher: International Monetary Fund
ISBN: 1475536933
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
China’s rapid credit expansion in 2009–10 brought local government financing platforms (LGFPs) into the spotlight. This paper discusses their function, reasons behind their recent expansion, and risks they are posing to the financial sector, local governments, and sovereign balance sheet. This paper argues that LGFPs were a fortune for China in the past, but would turn out to be a misfortune if the causes of the rapid expansion of LGFPs are not addressed promptly. In this context, the paper proposes ways to avoid misfortune by: acknowledging and addressing the revenue and expenditure mismatches at the local government level; establishing a comprehensive framework to regulate and supervise local government budgets; ensuring the sustainability of the financial resources obtained from the sale of land use rights; and developing local government bond markets and promoting financial reforms.
Author: MissYinqiu Lu
Publisher: International Monetary Fund
ISBN: 1484335902
Category : Business & Economics
Languages : zh-CN
Pages : 30
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Book Description
China’s rapid credit expansion in 2009–10 brought local government financing platforms (LGFPs) into the spotlight. This paper discusses their function, reasons behind their recent expansion, and risks they are posing to the financial sector, local governments, and sovereign balance sheet. This paper argues that LGFPs were a fortune for China in the past, but would turn out to be a misfortune if the causes of the rapid expansion of LGFPs are not addressed promptly. In this context, the paper proposes ways to avoid misfortune by: acknowledging and addressing the revenue and expenditure mismatches at the local government level; establishing a comprehensive framework to regulate and supervise local government budgets; ensuring the sustainability of the financial resources obtained from the sale of land use rights; and developing local government bond markets and promoting financial reforms.
Author: Hui Jin
Publisher: International Monetary Fund
ISBN: 1475536763
Category : Business & Economics
Languages : en
Pages : 32
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Book Description
In this paper, we argue that there is much room for China to strengthen its regulatory framework for public-private partnerships (PPPs). We show that infrastructure projects carried out through local government financing vehicles (LGFVs) were largely unregulated PPPs, and significant fiscal risks have already manifested themselves. While PPPs can potentially provide efficiency gains, they can also be used by governments to circumvent budgetary borrowing constraints. Therefore, effective PPP regulation is key to delivering PPPs’ benefits while containing their potential fiscal risks. The authorities have taken concrete steps in order to establish a sound regulatory framework and foster a new generation of PPPs. However, to make the framework effective, we highlight a few issues to be resolved. Based on international best practice, we propose a four-pillar regulatory framework for China, which could be implemented gradually in three stages.
Author: Donald C. Clarke
Publisher:
ISBN:
Category :
Languages : en
Pages : 65
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Book Description
Local government financing vehicles (“LGFVs”) -- companies capitalized and owned by local government and established for the purpose of raising funds for municipal infrastructure construction -- emerged in China in the 1980s as a response to the severe constraints on indebtedness by local governments themselves. The mushrooming of their number and indebtedness has sparked fears about their ability to repay the debt and the consequences of a default. In addition to taking on bank debt, a number of LGFVs have also issued bonds. While observers have questioned the value of collateral typically offered as security for the bonds, we know of no extensive analysis to date of the legal quality of the collateral: what exactly are the bondholders being promised, and what is the status of those promises in the Chinese legal system? This article is an attempt to answer that question, using data from two hand-collected samples of LGFV bond prospectuses from different regions in China in two different time periods. We find that current collateralization practices vary a great deal across bond issues and have changed over time, and discuss the legal and other problems attendant upon each type of backup. Remarkably, we find that unlike our initial sample of bond issues, recent bond issues virtually all state explicitly in the prospectus that they carry no security. Thus, the popular image of local governments wildly overpromising with guarantees they are not legally empowered to give seems, at least as far as recent bond issues are concerned, to be wholly wrong. This in turn calls into question the figures commonly provided for local government debt, since they often include LGFV debt that local government is neither legally nor morally obligated to pay. To be sure, they may wish to pay creditors voluntarily, but it is misleading to label as “debt” soft obligations of this nature. Creditors who have tried to force local governments to make good on their guarantees have uniformly failed, at most receiving half of what they sought. The argument that local governments have some politically enforceable obligation to pay on their guarantees does not seem supported by the evidence.
Author: Yang He
Publisher:
ISBN:
Category :
Languages : en
Pages :
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Book Description
Policy makers and researchers have been debating the financial health of Chinese local government debt after the global financial crisis. However, the lack of transparency makes it difficult to full evaluate the risk of local debt in China. The paper uses the data of local financing platform to estimate the magnitude of the local debt and lays out several policy implications for Chinese governments.
Author: Christine Wong
Publisher:
ISBN:
Category : Business & Economics
Languages : en
Pages : 408
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Book Description
This study focuses on the status of local government finance at the subprovincial level. Fiscal reforms over the past decade have not kept pace with the rapid changes in demand for government services at lower levels. Wong examines the composition of revenue and expenditure at city, country, and township levels, and provides recommendations.
Author: Yinqiu Lu
Publisher: International Monetary Fund
ISBN: 1475599676
Category : Business & Economics
Languages : en
Pages : 30
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Book Description
China’s rapid credit expansion in 2009–10 brought local government financing platforms (LGFPs) into the spotlight. This paper discusses their function, reasons behind their recent expansion, and risks they are posing to the financial sector, local governments, and sovereign balance sheet. This paper argues that LGFPs were a fortune for China in the past, but would turn out to be a misfortune if the causes of the rapid expansion of LGFPs are not addressed promptly. In this context, the paper proposes ways to avoid misfortune by: acknowledging and addressing the revenue and expenditure mismatches at the local government level; establishing a comprehensive framework to regulate and supervise local government budgets; ensuring the sustainability of the financial resources obtained from the sale of land use rights; and developing local government bond markets and promoting financial reforms.
Author: Naoyuki Yoshino
Publisher: Edward Elgar Publishing
ISBN: 1786436876
Category : Asia
Languages : en
Pages : 449
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Book Description
Sustainable and inclusive growth in emerging Asian economies requires high levels of public investment in areas such as infrastructure, education, health, and social services. The increasing complexity and regional diversity of these investment needs, together with the trend of democratization, has led to fiscal decentralization being implemented in many Asian economies. This book takes stock of some major issues regarding fiscal decentralization, including expenditure and revenue assignments, transfer programs, and sustainability of local government finances, and develops important findings and policy recommendations.
Author: Thomas Fingar
Publisher: Stanford University Press
ISBN: 1503612236
Category : Political Science
Languages : en
Pages : 535
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Book Description
China's future will be determined by how its leaders manage its myriad interconnected challenges. In Fateful Decisions, leading experts from a wide range of disciplines eschew broad predictions of success or failure in favor of close analyses of today's most critical demographic, economic, social, political, and foreign policy challenges. They expertly outline the options and opportunity costs entailed, providing a cutting-edge analytic framework for understanding the decisions that will determine China's trajectory. Xi Jinping has articulated ambitious goals, such as the Belt and Road Initiative and massive urbanization projects, but few priorities or policies to achieve them. These goals have thrown into relief the crises facing China as the economy slows and the population ages while the demand for and costs of education, healthcare, elder care, and other social benefits are increasing. Global ambitions and a more assertive military also compete for funding and policy priority. These challenges are compounded by the size of China's population, outdated institutions, and the reluctance of powerful elites to make reforms that might threaten their positions, prerogatives, and Communist Party legitimacy. In this volume, individual chapters provide in-depth analyses of key policies relating to these challenges. Contributors illuminate what is at stake, possible choices, and subsequent outcomes. This volume equips readers with everything they need to understand these complex developments in context.
Author:
Publisher:
ISBN:
Category : Military art and science
Languages : en
Pages : 132
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Book Description
