Analysis
China’s New Plan to Fix Debt Woes Is Seen as Marginal at Best
- Beijing is looking to shift more revenue to local governments
- Citigroup calls fiscal plans ‘a realistic but marginal remedy’
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Xi Jinping’s government has finally outlined its plan to fix a regional fiscal crisis that has weighed on China for years. Economists say it’s not nearly enough.
The ruling Communist Party signaled at a key policy meeting last week that Beijing is willing to share its tax revenue with regional governments while easing their spending burden, one of the country’s biggest tax revamps in decades. A core part of the plan involves passing the proceeds of consumption levies — which currently goes entirely to the central government — to cities and towns.