China clarifies fiscal management responsibility

The Chinese government is seeking to clarify the fiscal powers of central and local government as part of efforts to reform fiscal management and ensure efficient delivery of public services.

China will moderately increase the administrative obligations of the central government and reduce overlapping responsibilities between central and local government, according to a guideline issued by the State Council.

Spending responsibilities will be more accurately distributed depending on the nature of the public services, the State Council pledged.

It is also considering putting the supply of public services concerning regional economic development into the hands of upper levels, while giving some public services to the local level.

The guideline specified that pilot reforms will be carried out in national defense and foreign affairs in 2016, with the aim of achieving major breakthroughs in education, healthcare, environmental protection and public transportation between 2017 and 2018.

In 2019 to 2020, China plans to finish the reforms and revise relevant laws and regulations accordingly.

The move came as a lack of clarity in assigning responsibility to different levels of government has caused problems, such as widening regional disparities, increasing local government debt and inefficient delivery of public services. Endi