Government Finances

Local government revenue growth slumps in January

China's local governments suffered last month a slump in budgetary revenue growth, raising further doubts over the ability of local governments to service their debts and drive fixed asset investment projects. We think that constrained local budget revenue growth puts extra pressure on state banks to roll over local government debt, hampers fixed asset investment initiatives at the local level and obliges Beijing to keep liquidity policy in a loosening trend for as long as inflation permits.

Stimulus required

Though a repeat of the muscular Rmb4.0tn stimulus package seen in 2009-2010 is now hardly possible, the need for Beijing to inject extra vigour into consumer spending, exports and even fixed asset investments is slowly becoming clearer.

Utility prices climb

Artificial suppression of key utility prices – including water, electricity and gas – has been part of the secret of China’s industrial success. But now things are changing.

Financial reform hit as "China sub-prime" concerns grow

Concerns over financial fragility, mixed with a conservative political atmosphere ahead of the 2012 political succession is hitting the pace of financial reform.

LGFV loans, still a time bomb

The new figures released by the National Audit Office grossly understate the scale of local government financing vehicle debt in the economy.

Another big liquidity call augurs ill for A-shares

Tighter capital adequacy ratio requirements are driving banks to tap the liquidity pool through share and bond issuance.

Rate Hike Dissected

The October 19 hike in interest rates has triggered a vigorous debate over its aims and what it signals for the future.

The pension problem

Dr Kerry Brown, senior fellow of the Asia Programme at Chatham House, talks on one of the biggest challenges facing Beijing this decade.

How sustainable is the economic rebound?

Leading economists debate the vital signs that hold the key to China’s medium-term economic future.

A local financial time bomb

Local government finances constitute the biggest single long-term risk to China's financial system.

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09 Feb 2012

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