Local governments' issuing of bonds on agenda for party's fourth plenum

One topic high on the agenda at this week's Communist Party plenum is likely to be how local governments can raise and spend funds more efficiently.

Although the plenum will focus mainly on political affairs, such as judicial reforms and institutional change within the party, leaders are expected to offer broad guidelines on fiscal and budgetary reforms, including the issuance of local government bonds.

"I am hopeful that the fourth plenum will address one of the toughest questions left over from the third plenum - implementation risk," said Stephen Roach, a Yale University professor and former chairman of Morgan Stanley Asia.

"Without further progress in legal reform and judicial independence, it will be very difficult to dislodge the power blocs that stand in the way of restructuring and reform," he said.

Such advances were needed "to end the fragmentation and excesses of local government power that lead to seriously distorted incentives and misallocation of resources", Roach said.

Many steps covering fiscal reform and the overhaul of the state-owned sector and the land system have proceeded more slowly than expected since the third plenum last November.