Institution(s): Hong Kong Institute of Economics and Business Strategy, Asia Global Institute

Date: Jan 30, 2016 (Saturday)

Time: 02:00 pm - 03:30 pm

Venue: Room, 101, K.K. Leung Building, HKU

Abstract:

China is a unitary country, but local governments have long enjoyed substantial autonomy. As China enters the third year of a sweeping, comprehensive program of reforms promised by Xi Jinping and the top leadership at the Third Plenum of the 18th Party Congress in November 2012, the spotlight may turn in 2016 to intergovernmental fiscal reform. A draft proposal for revising the division of responsibilities between central and local governments is currently under consideration by State Council, and a number of tax measures are on the docket at the National People’s Congress.

 

Implementation of fiscal reform is central to the Xi Jinping program to modernize governance. By one count, public finance is involved in 205 of the 336 policy initiatives laid out in the Third Plenum Decisions, and leads on 76 of them. Spearheaded by the able and plain-speaking Finance Minister Lou Jiwei, a road map for fiscal reform was announced in late 2013, to begin with financial management reform in 2014, follow with tax reform in 2015, and build up to intergovernmental reform in 2016. Since then, far-reaching measures have rolled out one after another, with approval from the highest authorities, to provide the supporting legal framework. Right on schedule, Minister Lou is now rolling up his sleeves to tackle the critically important but thorny area of intergovernmental reform.

 

This lecture examines the rollout of fiscal reform over the past two years and assesses the outlook going forward. Professor Wong will focus on an analysis of the architecture of China’s fiscal and administrative systems, and draw from the political economy of reform in transition countries, to argue that the road will be long and bumpy. Most critically, the reform will be slowed by what Professor Wong calls “the hurdle and the trap” – the challenge of resolving the local government debt crisis while maintaining stable economic growth through the 13th five year plan.

File for Download:  Poster_Wong_01302016.pdf

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