A cockle farmer trudges through a muddy field near the Meizhou Bay bridge, which is under construction as part of the Fuzhou-Xiamen high-speed railway project, in Putain, Fujian province, China, on February 8. Local governments have poured funds raised by the floating of bonds into infrastructure projects. Photo: Bloomberg A cockle farmer trudges through a muddy field near the Meizhou Bay bridge, which is under construction as part of the Fuzhou-Xiamen high-speed railway project, in Putain, Fujian province, China, on February 8. Local governments have poured funds raised by the floating of bonds into infrastructure projects. Photo: Bloomberg
A cockle farmer trudges through a muddy field near the Meizhou Bay bridge, which is under construction as part of the Fuzhou-Xiamen high-speed railway project, in Putain, Fujian province, China, on February 8. Local governments have poured funds raised by the floating of bonds into infrastructure projects. Photo: Bloomberg
Yukon Huang
Opinion

Opinion

The View by Yukon Huang and Joshua Levy

China’s local government debt may not cause a financial crisis, but it poses a huge fiscal challenge

  • China must boost its tax rates and realign tax and expenditure responsibilities so local governments become less dependent on revenue allocations from Beijing and land sales to finance their expenditure

Yukon HuangJoshua Levy
Yukon Huang  and Joshua Levy

Updated: 4:24am, 28 May, 2021

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A cockle farmer trudges through a muddy field near the Meizhou Bay bridge, which is under construction as part of the Fuzhou-Xiamen high-speed railway project, in Putain, Fujian province, China, on February 8. Local governments have poured funds raised by the floating of bonds into infrastructure projects. Photo: Bloomberg A cockle farmer trudges through a muddy field near the Meizhou Bay bridge, which is under construction as part of the Fuzhou-Xiamen high-speed railway project, in Putain, Fujian province, China, on February 8. Local governments have poured funds raised by the floating of bonds into infrastructure projects. Photo: Bloomberg
A cockle farmer trudges through a muddy field near the Meizhou Bay bridge, which is under construction as part of the Fuzhou-Xiamen high-speed railway project, in Putain, Fujian province, China, on February 8. Local governments have poured funds raised by the floating of bonds into infrastructure projects. Photo: Bloomberg
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Yukon Huang

Yukon Huang

Yukon Huang is a senior fellow at the Carnegie Endowment and author of "Cracking the China Conundrum – Why Conventional Economic Wisdom Is Wrong".

Joshua Levy

Joshua Levy

Joshua Levy is currently a James C. Gaither Junior Fellow with the Carnegie Endowment of International Peace’s Asia Programme. He is a graduate of Georgetown University's Edmund A. Walsh School of Foreign Service where he studied International Political Economy and Mathematics. He currently resides in Washington, D.C.