Local Government

Local officials' obsession with GDP growth hinders better land use efficiency in China

When working on land supply plans, mainland local governments make generating taxable economic activity and jobs a priority. Photo: EPA

Local government officials need to tone down their obsession with economic growth if China’s efforts to improve land use efficiency are to succeed, industry analysts said.

Thursday, 9 January, 2014, 11:32pm

Moody's warns on China local government debt, financing vehicles

Moody's lowered its outlook for China's sovereign credit rating to stable from positive in April. Photo: Bloomberg

The ability of the mainland's local governments to repay their debt is being questioned, with analysts warning that the liabilities may be underestimated. Increased use of irregular financing activities such as trust loans, leases, wealth-management products and project financing pose a risk to local government finances, Moody's analyst Debra Roane said in a report.

17 Jun 2013 - 5:52am

China environment ministry accused of passing buck on project approvals

Pan Yue, Deputy minister of the Ministry of Environmental Protection. Photo: Reuters

The environment ministry is planning to hand many of its approval powers over industrial projects to local governments, a move it says is aimed at reducing regulatory interference.

3 Jun 2013 - 7:52am 1 comment

IMF warns China of risks in investment binge

Spending on highways, along with other big-ticket projects, ensures that local government debts stay in the fast lane. Photo: Bloomberg

The International Monetary Fund has urged self-discipline on China's provincial and city governments, warning headlong investment fuelled by rapid credit growth may threaten economic sustainability. The IMF's alert underscores the challenges facing the mainland's new leaders as they seek to lessen financial risk while keeping economic growth stable.

30 May 2013 - 3:49am

State Council orders probe into pricey buildings

The Jinan city government building. Photos: SCMP

According to its "urgent notification", the State Council ordered thorough checks to see whether central or local government agencies had used public funds to build extravagant offices, halls or guest houses.

19 May 2013 - 6:30am

Questions over son's rapid rise in Guangdong county leads to his demotion

Jiang Zhongyong

A 29-year-old deputy county head of Jieyang in Guangdong has been demoted to the rank of clerk after internet users questioned whether his father, who held the post before him, had a hand in his son's fast-track promotion.

12 May 2013 - 6:28am 1 comment

Zombie China assets threaten lenders

Difficult debts

Last month Zhang Ke, the boss of accounting firm ShineWing, gave voice to fears shared by an increasing number of people. China's local government debts were "out of control", he told the Financial Times newspaper, and warned of a looming crisis.

6 May 2013 - 3:34am 2 comments

Mounting local government debt a crisis in the making in China

The central bank should lead the new regulatory regime, and facilitate co-operation and information sharing such as with the China Banking Regulatory Commission. Photo: Bloomberg

Warning of local governments' high exposure to bad debts, credit agency Fitch recently downgraded China's long-term local-currency rating from AA-minus to A-plus. Chinese officials should take note: the downgrade underlines how closely international markets are watching developments in China.

18 Apr 2013 - 3:18am 1 comment

Old Chinese tourist town opposes new entry fee

Fenghuang businesses are upset by a new entry fee imposed on visitors. Photo: SMP

Shop owners in Fenghuang old town, a popular tourist site in Hunan province , have seen business fall by as much as half since the local government introduced an entry fee for tourists last week. They went on strike on Wednesday over the charge.

14 Apr 2013 - 1:56pm 1 comment

China ignores at its own peril its hidden debt risks

China is now experiencing an elevated debt risk characterised by high levels of accumulated local-government and corporate debt. Photo: Reuters

Since China's era of reform and opening up began, the country has experienced three instances of large-scale public-finance problems. In the late 1970s, it faced a debilitating fiscal deficit. In the 1990s, its corporate sector was plagued by "triangular debts". Later that decade, financial institutions were burdened by bad debts generated by state-owned enterprises.

26 Mar 2013 - 3:28am

PBOC sounds warning over local government loans

Zhou Xiaochuan says 20 per cent of the loans to the financing vehicles need to be paid out of local governments' budgets. Photo: Simon Song

People's Bank of China governor Zhou Xiaochuan said attention needed to be paid to the development of local governments' financing vehicles and their hidden risks.

14 Mar 2013 - 7:47am

State Council vows to give business a freer hand

TCL chairman Li Dongsheng is optimistic, others less so.

The State Council yesterday issued its latest plan to reduce red tape and administrative intervention in business, part of a major drive by the new leadership to build a more market- oriented, macro-regulating and efficient government.

11 Mar 2013 - 6:06am

Local government plans signal robust investment

Local governments have banked on major projects to drive economic growth, such as this hydroelectric dam in Guizhou province, raising the concern of experts. Photo: EPA

The mainland economy may continue to rely on investments this year, going by the development goals laid out by leaders from more than 30 provinces and municipalities.

2 Mar 2013 - 5:25am

New Shanghai mayor vows to treat city's problems as 'a citizen'

Shanghai Mayor Yang Xiong. Photo: AP

Shanghai's new mayor, Yang Xiong, said yesterday he understood the "inadequacies" of public services as "a citizen" of the mainland's commercial hub.

3 Feb 2013 - 5:48am

Rich coastal townships hope to profit from urbanisation push

Li Keqiang, urban champion

Affluent coastal townships are scrambling to get themselves classified as cities amid reports that the central government is thrashing out new policies to foster its urbanisation goals.

6 Jan 2013 - 4:46am

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