China’s Government Spending: Central vs. Local

China’s Government Spending: Central vs. Local

’s Daily Chart examines China’s bottom-heavy government spending and small but stubborn budget deficit. Expenditure at lower levels is “often wasteful, as local governments compete with neighbors to promote industry, not provide public goods like . A tax on property could reverse this by increasing revenues and encouraging public services.”

between local governments has led them to take on heavy debt, estimated at 27% of GDP in 2010 and much higher now. Although they receive a high proportion of total government revenues, moreover, the money is spread thinly, leading many authorities to supplement their budgets with highly unpopular land grabs and subsequent redevelopment.

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