Taxing times for local government debt

Fiscal | Zheng Yangpeng

The central government will make up the shortfall in local governments' revenues by slashing specially earmarked funds and boosting rule-based transfers, instead of directly ceding fiscal powers, the vise finance minister said on Tuesday.

In a news briefing on the reform blueprint by the Third Plenum of the 18th Central Committee of the Communist Party of China, vice finance minister Wang Bao'an said the reform direction for China's public finance distribution system is to take back much responsibility for funds previously entrusted to local governments.