European Parliament Library

Fiscal Vulnerabilities and Risks from Local Government Finance in China, Yuanyan Zhang, Steven Barnett

China weathered the global financial crisis better than most, thanks to a large and timely stimulus. This stimulus, however, was mainly in the form of off-budget infrastructure spending and thus not visible in the headline fiscal data. We construct a time series for the augmented fiscal deficit and debt—augmented to include off-budget activity—that better illustrates the counter-cyclical role of fiscal policy. The results also show that the augmented fiscal deficit and debt are both considerably higher than the headline government data suggest. Nonetheless, at around 45 percent of GDP, the augmented debt is still at a manageable level
Table Of Contents
Cover; Contents; I. Introduction; Boxes; 1. China: Explaining ""Augmented"" Government Debt and Deficit; II. Background; A. Definition of Government; 2. Examples of LGFV; B. Other Estimates of Augmented Fiscal Debt; III. Augmented Fiscal Deficit and Net Borrowing; A. Augmented Net Borrowing; 3. Land Financing Model; Figures; 1. Real Estate Investment in Local Finances; B. Augmented Fiscal Deficit; C. Robustness Check: Above-the-Line Estimates; D. Interpretting the Estimates; IV. Augmented Fiscal Debt; A. Debt Sustainability; B. Interest Rate Growth Differential
Literary Form
non fiction
Description based upon print version of record
Physical Description
1 online resource (30 p.)
Specific Material Designation
Form Of Item

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