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County-level fiscal strait and resolutions in China

Author

Listed:
  • Dan Luo
  • Ronghua Ju

Abstract

Purpose - The purpose of the paper is to examine China's county-level fiscal difficulties. A large portion of China's counties (county-level cities) have to run with the shortage of financial resources and huge government debt. To make a suitable policy to solve this problem is a top priority. Design/methodology/approach - Using the first-hand survey data, the paper compares nine sample counties whose economic development level is different, sums up the difficulties county-level governments are facing and explores countermeasures from qualitative and quantitative approaches. Findings - By studying the survey data of nine sample counties (cities), it is found that county-level finance is facing the following problems: low-level fiscal revenue, high debt risk and large gap of fiscal revenue between different counties (cities). Based on these findings, the paper provides suggestions such as ensuring that the county-level government has sufficient fiscal resources and improving the transfer payment system. Originality/value - Data from three well-developed counties (county-level cities), three middle-income counties (county-level cities) and three backward counties made the paper's findings more comprehensive and realistic and suggestions more practical.

Suggested Citation

  • Dan Luo & Ronghua Ju, 2011. "County-level fiscal strait and resolutions in China," China Agricultural Economic Review, Emerald Group Publishing, vol. 3(2), pages 210-223, May.
  • Handle: RePEc:eme:caerpp:v:3:y:2011:i:2:p:210-223
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    References listed on IDEAS

    as
    1. Lewis, Blane D., 2003. "Local Government Borrowing and Repayment in Indonesia: Does Fiscal Capacity Matter?," World Development, Elsevier, vol. 31(6), pages 1047-1063, June.
    2. Adam, Christopher S. & Bevan, David L., 2005. "Fiscal deficits and growth in developing countries," Journal of Public Economics, Elsevier, vol. 89(4), pages 571-597, April.
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