The Fiscal Framework and Urban Infrastructure Finance in China
China has experienced more than 25 years of extraordinary economic growth. Underlying this growth has been a decentralized fiscal system, in which provinces and large cities are given the freedom to make infrastructure investments to stimulate local development, and are allowed to retain a large par...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
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World Bank, Washington, DC
2012
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| Online Access: | http://documents.worldbank.org/curated/en/2006/11/7157765/fiscal-framework-urban-infrastructure-finance-china http://hdl.handle.net/10986/9286 |
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okr-10986-9286 |
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| recordtype |
oai_dc |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
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World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English en_US |
| topic |
ACCOUNTING ASSET SALES ASSETS AUTONOMY BAD DEBT BALANCED BUDGETS BANKING SECTOR BANKS BONDS BORROWING BUDGET CONSTRAINT BUDGET EXECUTION BUDGETARY FUNDS BUDGETARY REVENUES BUSINESS TAX BUSINESS TAXES CAPACITY CONSTRAINTS CAPITAL GAINS CENTRAL AUTHORITIES CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CENTRAL TRANSFERS CITIES COMPANY INCOME TAX CONSUMPTION TAXES DEBT DEBT FINANCING DEFICITS DEREGULATION ECONOMIC REFORM EXPENDITURE ASSIGNMENTS EXPENDITURE FUNCTIONS EXPENDITURE RESPONSIBILITIES FISCAL AUTONOMY FISCAL CAPACITY FISCAL CONTRACTING FISCAL DECENTRALIZATION FISCAL DISPARITIES FISCAL FLOWS FISCAL FRAMEWORK FISCAL GAP FISCAL MANAGEMENT FISCAL POLICY FISCAL PROBLEMS FISCAL REFORM FISCAL RESOURCES FISCAL RISK FISCAL SITUATION FISCAL STIMULUS FISCAL SYSTEM FISCAL SYSTEMS FIXED ASSET FOREIGN BANKS GARBAGE COLLECTION GOVERNMENT BORROWING GOVERNMENT SHARE GOVERNMENT SPENDING IMPORT TARIFFS INCOME DISTRIBUTION INCOME LEVEL INCOME TAX REVENUES INCOME TAXES INCREMENTAL REVENUE SHARING INFLATIONARY PRESSURES INFRASTRUCTURE LOANS INSURANCE INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL REFORM INTERGOVERNMENTAL FISCAL SYSTEM INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFER SYSTEM INTERGOVERNMENTAL TRANSFERS LAND USE LAND VALUE LAND VALUE INCREMENT TAXES LEGISLATION LEVEL OF GOVERNMENT LEVELS OF GOVERNMENT LOCAL AUTHORITIES LOCAL AUTONOMY LOCAL BUDGET LOCAL BUDGETS LOCAL CAPITAL CONSTRUCTION LOCAL DEVELOPMENT LOCAL ENTERPRISE LOCAL FEES LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL INFRASTRUCTURE LOCAL RESOURCES LOCAL REVENUE LOCAL SERVICES LOCAL STATE LOCAL TAX MASS TRANSIT MINISTRY OF FINANCE MUNICIPAL MUNICIPAL GOVERNMENT MUNICIPAL GOVERNMENTS MUNICIPAL REVENUE MUNICIPALITIES NATIONAL GOVERNMENTS NATIONAL POLICY NATIONAL REVENUES NATIONAL TAX NATIONAL TAXES NEW ENTRANTS NONBANK FINANCIAL INSTITUTIONS OPERATING SURPLUS PAYMENT SYSTEM PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES PRINCIPLE OF REVENUE ASSIGNMENT PROPERTY TAXES PROVINCIAL GOVERNMENT PROVINCIAL GOVERNMENTS PROVINCIAL REVENUE PUBLIC DEBT PUBLIC FINANCING PUBLIC GOODS PUBLIC INFRASTRUCTURE PUBLIC SECTOR PUBLIC TRANSPORTATION PUBLIC UTILITIES REGIONAL DISPARITIES REGIONAL ECONOMY REGIONAL TAX REVENUE ASSIGNMENT REVENUE COLLECTION REVENUE SHARE REVENUE SHARING REVENUE SOURCES REVENUE STRUCTURE SERVICE CHARGES SERVICE DELIVERY SOCIAL DEVELOPMENT SOCIAL PROTECTION SOCIAL SECURITY SOCIAL WELFARE SOCIAL WELFARE PROTECTION STATE OWNED ENTERPRISES SUB-NATIONAL GOVERNMENT SUB-NATIONAL GOVERNMENTS SURCHARGES TAX ASSIGNMENT TAX BASE TAX BURDEN TAX COLLECTION TAX RATE TAX RATES TAX REFORM TAX REVENUE TAX REVENUES TAX STRUCTURE TAX SYSTEM TAXATION TRANSFER PAYMENTS TRANSFER SYSTEM TRANSFER SYSTEMS URBAN DEVELOPMENT URBAN INFRASTRUCTURE URBANIZATION USER CHARGES VALUE ADDED TAXES WATER SUPPLY |
| spellingShingle |
ACCOUNTING ASSET SALES ASSETS AUTONOMY BAD DEBT BALANCED BUDGETS BANKING SECTOR BANKS BONDS BORROWING BUDGET CONSTRAINT BUDGET EXECUTION BUDGETARY FUNDS BUDGETARY REVENUES BUSINESS TAX BUSINESS TAXES CAPACITY CONSTRAINTS CAPITAL GAINS CENTRAL AUTHORITIES CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CENTRAL TRANSFERS CITIES COMPANY INCOME TAX CONSUMPTION TAXES DEBT DEBT FINANCING DEFICITS DEREGULATION ECONOMIC REFORM EXPENDITURE ASSIGNMENTS EXPENDITURE FUNCTIONS EXPENDITURE RESPONSIBILITIES FISCAL AUTONOMY FISCAL CAPACITY FISCAL CONTRACTING FISCAL DECENTRALIZATION FISCAL DISPARITIES FISCAL FLOWS FISCAL FRAMEWORK FISCAL GAP FISCAL MANAGEMENT FISCAL POLICY FISCAL PROBLEMS FISCAL REFORM FISCAL RESOURCES FISCAL RISK FISCAL SITUATION FISCAL STIMULUS FISCAL SYSTEM FISCAL SYSTEMS FIXED ASSET FOREIGN BANKS GARBAGE COLLECTION GOVERNMENT BORROWING GOVERNMENT SHARE GOVERNMENT SPENDING IMPORT TARIFFS INCOME DISTRIBUTION INCOME LEVEL INCOME TAX REVENUES INCOME TAXES INCREMENTAL REVENUE SHARING INFLATIONARY PRESSURES INFRASTRUCTURE LOANS INSURANCE INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL REFORM INTERGOVERNMENTAL FISCAL SYSTEM INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFER SYSTEM INTERGOVERNMENTAL TRANSFERS LAND USE LAND VALUE LAND VALUE INCREMENT TAXES LEGISLATION LEVEL OF GOVERNMENT LEVELS OF GOVERNMENT LOCAL AUTHORITIES LOCAL AUTONOMY LOCAL BUDGET LOCAL BUDGETS LOCAL CAPITAL CONSTRUCTION LOCAL DEVELOPMENT LOCAL ENTERPRISE LOCAL FEES LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL INFRASTRUCTURE LOCAL RESOURCES LOCAL REVENUE LOCAL SERVICES LOCAL STATE LOCAL TAX MASS TRANSIT MINISTRY OF FINANCE MUNICIPAL MUNICIPAL GOVERNMENT MUNICIPAL GOVERNMENTS MUNICIPAL REVENUE MUNICIPALITIES NATIONAL GOVERNMENTS NATIONAL POLICY NATIONAL REVENUES NATIONAL TAX NATIONAL TAXES NEW ENTRANTS NONBANK FINANCIAL INSTITUTIONS OPERATING SURPLUS PAYMENT SYSTEM PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES PRINCIPLE OF REVENUE ASSIGNMENT PROPERTY TAXES PROVINCIAL GOVERNMENT PROVINCIAL GOVERNMENTS PROVINCIAL REVENUE PUBLIC DEBT PUBLIC FINANCING PUBLIC GOODS PUBLIC INFRASTRUCTURE PUBLIC SECTOR PUBLIC TRANSPORTATION PUBLIC UTILITIES REGIONAL DISPARITIES REGIONAL ECONOMY REGIONAL TAX REVENUE ASSIGNMENT REVENUE COLLECTION REVENUE SHARE REVENUE SHARING REVENUE SOURCES REVENUE STRUCTURE SERVICE CHARGES SERVICE DELIVERY SOCIAL DEVELOPMENT SOCIAL PROTECTION SOCIAL SECURITY SOCIAL WELFARE SOCIAL WELFARE PROTECTION STATE OWNED ENTERPRISES SUB-NATIONAL GOVERNMENT SUB-NATIONAL GOVERNMENTS SURCHARGES TAX ASSIGNMENT TAX BASE TAX BURDEN TAX COLLECTION TAX RATE TAX RATES TAX REFORM TAX REVENUE TAX REVENUES TAX STRUCTURE TAX SYSTEM TAXATION TRANSFER PAYMENTS TRANSFER SYSTEM TRANSFER SYSTEMS URBAN DEVELOPMENT URBAN INFRASTRUCTURE URBANIZATION USER CHARGES VALUE ADDED TAXES WATER SUPPLY Su, Ming Zhao, Quanhou The Fiscal Framework and Urban Infrastructure Finance in China |
| geographic_facet |
East Asia and Pacific |
| relation |
Policy Research Working Paper; No. 4051 |
| description |
China has experienced more than 25 years of extraordinary economic growth. Underlying this growth has been a decentralized fiscal system, in which provinces and large cities are given the freedom to make infrastructure investments to stimulate local development, and are allowed to retain a large part of the fiscal revenues that are generated from economic activity. Although successful as a growth strategy, this policy created two problems for national fiscal management. First, it significantly reduced the central government's share of fiscal revenues, which fell from 34.8 percent in 1980 to 22 percent in 1992. Second, it widened economic and fiscal disparities between the rapidly growing urban coastal region and the rest of the country. Rapid growth in subnational debt (which rose 23-fold in a decade) and subnational nonperforming loans (estimated by the authors to range between US$100 billion and US$150 billion) has placed pressure on China's financial system. Traditionally, China has favored bank lending as a source of finance because the banking system has provided a vehicle for central political control over local debt. But as China's financial system matures, creditworthiness standards must become more important. The authors recommend greater use of the revenue streams from infrastructure assets as a financing source, and gradual relaxation of central political control over subnational debt. One step in this direction would permit leading cities to issue municipal bonds based on objective financial standards. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Su, Ming Zhao, Quanhou |
| author_facet |
Su, Ming Zhao, Quanhou |
| author_sort |
Su, Ming |
| title |
The Fiscal Framework and Urban Infrastructure Finance in China |
| title_short |
The Fiscal Framework and Urban Infrastructure Finance in China |
| title_full |
The Fiscal Framework and Urban Infrastructure Finance in China |
| title_fullStr |
The Fiscal Framework and Urban Infrastructure Finance in China |
| title_full_unstemmed |
The Fiscal Framework and Urban Infrastructure Finance in China |
| title_sort |
fiscal framework and urban infrastructure finance in china |
| publisher |
World Bank, Washington, DC |
| publishDate |
2012 |
| url |
http://documents.worldbank.org/curated/en/2006/11/7157765/fiscal-framework-urban-infrastructure-finance-china http://hdl.handle.net/10986/9286 |
| _version_ |
1764406828501827584 |
| spelling |
okr-10986-92862021-04-23T14:02:41Z The Fiscal Framework and Urban Infrastructure Finance in China Su, Ming Zhao, Quanhou ACCOUNTING ASSET SALES ASSETS AUTONOMY BAD DEBT BALANCED BUDGETS BANKING SECTOR BANKS BONDS BORROWING BUDGET CONSTRAINT BUDGET EXECUTION BUDGETARY FUNDS BUDGETARY REVENUES BUSINESS TAX BUSINESS TAXES CAPACITY CONSTRAINTS CAPITAL GAINS CENTRAL AUTHORITIES CENTRAL GOVERNMENT CENTRAL GOVERNMENTS CENTRAL TRANSFERS CITIES COMPANY INCOME TAX CONSUMPTION TAXES DEBT DEBT FINANCING DEFICITS DEREGULATION ECONOMIC REFORM EXPENDITURE ASSIGNMENTS EXPENDITURE FUNCTIONS EXPENDITURE RESPONSIBILITIES FISCAL AUTONOMY FISCAL CAPACITY FISCAL CONTRACTING FISCAL DECENTRALIZATION FISCAL DISPARITIES FISCAL FLOWS FISCAL FRAMEWORK FISCAL GAP FISCAL MANAGEMENT FISCAL POLICY FISCAL PROBLEMS FISCAL REFORM FISCAL RESOURCES FISCAL RISK FISCAL SITUATION FISCAL STIMULUS FISCAL SYSTEM FISCAL SYSTEMS FIXED ASSET FOREIGN BANKS GARBAGE COLLECTION GOVERNMENT BORROWING GOVERNMENT SHARE GOVERNMENT SPENDING IMPORT TARIFFS INCOME DISTRIBUTION INCOME LEVEL INCOME TAX REVENUES INCOME TAXES INCREMENTAL REVENUE SHARING INFLATIONARY PRESSURES INFRASTRUCTURE LOANS INSURANCE INTERGOVERNMENTAL FINANCE INTERGOVERNMENTAL FISCAL REFORM INTERGOVERNMENTAL FISCAL SYSTEM INTERGOVERNMENTAL TRANSFER INTERGOVERNMENTAL TRANSFER SYSTEM INTERGOVERNMENTAL TRANSFERS LAND USE LAND VALUE LAND VALUE INCREMENT TAXES LEGISLATION LEVEL OF GOVERNMENT LEVELS OF GOVERNMENT LOCAL AUTHORITIES LOCAL AUTONOMY LOCAL BUDGET LOCAL BUDGETS LOCAL CAPITAL CONSTRUCTION LOCAL DEVELOPMENT LOCAL ENTERPRISE LOCAL FEES LOCAL GOVERNMENT LOCAL GOVERNMENTS LOCAL INFRASTRUCTURE LOCAL RESOURCES LOCAL REVENUE LOCAL SERVICES LOCAL STATE LOCAL TAX MASS TRANSIT MINISTRY OF FINANCE MUNICIPAL MUNICIPAL GOVERNMENT MUNICIPAL GOVERNMENTS MUNICIPAL REVENUE MUNICIPALITIES NATIONAL GOVERNMENTS NATIONAL POLICY NATIONAL REVENUES NATIONAL TAX NATIONAL TAXES NEW ENTRANTS NONBANK FINANCIAL INSTITUTIONS OPERATING SURPLUS PAYMENT SYSTEM PERSONAL INCOME PERSONAL INCOME TAX PERSONAL INCOME TAXES PRINCIPLE OF REVENUE ASSIGNMENT PROPERTY TAXES PROVINCIAL GOVERNMENT PROVINCIAL GOVERNMENTS PROVINCIAL REVENUE PUBLIC DEBT PUBLIC FINANCING PUBLIC GOODS PUBLIC INFRASTRUCTURE PUBLIC SECTOR PUBLIC TRANSPORTATION PUBLIC UTILITIES REGIONAL DISPARITIES REGIONAL ECONOMY REGIONAL TAX REVENUE ASSIGNMENT REVENUE COLLECTION REVENUE SHARE REVENUE SHARING REVENUE SOURCES REVENUE STRUCTURE SERVICE CHARGES SERVICE DELIVERY SOCIAL DEVELOPMENT SOCIAL PROTECTION SOCIAL SECURITY SOCIAL WELFARE SOCIAL WELFARE PROTECTION STATE OWNED ENTERPRISES SUB-NATIONAL GOVERNMENT SUB-NATIONAL GOVERNMENTS SURCHARGES TAX ASSIGNMENT TAX BASE TAX BURDEN TAX COLLECTION TAX RATE TAX RATES TAX REFORM TAX REVENUE TAX REVENUES TAX STRUCTURE TAX SYSTEM TAXATION TRANSFER PAYMENTS TRANSFER SYSTEM TRANSFER SYSTEMS URBAN DEVELOPMENT URBAN INFRASTRUCTURE URBANIZATION USER CHARGES VALUE ADDED TAXES WATER SUPPLY China has experienced more than 25 years of extraordinary economic growth. Underlying this growth has been a decentralized fiscal system, in which provinces and large cities are given the freedom to make infrastructure investments to stimulate local development, and are allowed to retain a large part of the fiscal revenues that are generated from economic activity. Although successful as a growth strategy, this policy created two problems for national fiscal management. First, it significantly reduced the central government's share of fiscal revenues, which fell from 34.8 percent in 1980 to 22 percent in 1992. Second, it widened economic and fiscal disparities between the rapidly growing urban coastal region and the rest of the country. Rapid growth in subnational debt (which rose 23-fold in a decade) and subnational nonperforming loans (estimated by the authors to range between US$100 billion and US$150 billion) has placed pressure on China's financial system. Traditionally, China has favored bank lending as a source of finance because the banking system has provided a vehicle for central political control over local debt. But as China's financial system matures, creditworthiness standards must become more important. The authors recommend greater use of the revenue streams from infrastructure assets as a financing source, and gradual relaxation of central political control over subnational debt. One step in this direction would permit leading cities to issue municipal bonds based on objective financial standards. 2012-06-26T19:52:10Z 2012-06-26T19:52:10Z 2006-11 http://documents.worldbank.org/curated/en/2006/11/7157765/fiscal-framework-urban-infrastructure-finance-china http://hdl.handle.net/10986/9286 English en_US Policy Research Working Paper; No. 4051 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research East Asia and Pacific |