Bulletin n. 2-3/2013
February 2014
CONTENTS
  • Section A) The theory and practise of the federal states and multi-level systems of government
  • Section B) Global governance and international organizations
  • Section C) Regional integration processes
  • Section D) Federalism as a political idea
    • Jun Ma
    Hidden Fiscal Risks in Local China
    in Australian Journal of Public Administration , volume 72 n.3 ,  2013 ,  278-92
    Public debts as well as the fiscal risks associated with them have been a global concern for our time. This paper examines fiscal risks in China, particularly fiscal risks at the local (sub-national) government level. Under the current system of Chinese intergovernmental relations, local governments are precluded from borrowing and offering guarantees for any borrowing activity. However, almost all of them have become deeply involved in debt finance, mainly in the form of contingent liabilities. Although there will not be a debt crisis in China in the near future, certain risks are hidden in China's local debt. This article therefore recommends China reform its intergovernmental relations and formally grant authority to local governments to borrow so that they are subject to transparent debt market constraints.
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