What a debt crisis in the provinces says about governing China
Key:
Local governments receive roughly half of total tax revenues but are responsible for two-thirds of government spending.
under local-authority control, known as a “local government financing vehicle”, or LGFV. to raise money from banks, the bond market and consumers.
The national government began to include assessments of local officials’ borrowing decisions in their annual performance reviews.
In principle, it ought to be possible to make a clearer division of tax-raising powers between the centre and periphery, a prospect raised in the five-year plan and reiterated by Mr Xi at a party congress in October. Such a deal would lessen the mismatch between spending and revenues.
The local-debt crisis will be a test of whether he plans to reform the system of government in China, or whether he will be content merely to have its top layer stacked with his allies.
重点是最后一句
dysfunctional relationship 失调的
back from the dead 死而复生
revenue-raising powers 征税权
fixed shares of certain taxes 固定份额的
value-added tax 增值税
prefecture 县
keep afloat 保持稳定发展
state firms 国企
as collateral 作为抵押
a shadowy kind of investment company 影子投资公司
local government financing vehicle 地方政府融资工具
Kicking the tyres 考虑中
disguise their shenanigans 掩盖他们的诡计
was quoted by the magazine as saying that
a new tax base 税基
have its top layer stacked with his allies
1、A big part of the debt problem stems from a dysfunctional relationship between central and local governments. Tensions between them pushed up debt to dangerous levels in 2015.
2、 As one epigram puts it: “The empire, long divided, must unite; long united, must divide.”
3、Such firms used state-owned land and shares in local state firms as collateral to raise money from banks, the bond market and consumers.
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