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Tuesday, June 20, 2017
China's Central Government should adjust local government objective assessment
ANBOUND

Under the "New Normal" economy, China's Central Government is facing new challenges in its management and control of local governments. Take the debts of the local governments as example, under the de-leveraging, local government debt growth is strictly limited, the financing is facing severe constraints, which would easily lead to local government’s "behavioral malformations." Over time, this could cause serious problems. In the medium and long term, China would depend on the development to solve structural, dynamic problems, as well as the problems of the inadequate resources for development. Yet, this will consume cost and take time. Anbound believes that in the short term, China’s Central Government can adjust the assessment objectives and mechanism, and appropriately relax certain local development objective assessment to provide more development flexibility for local officials, in order to reduce the pressure of local governments’ assessment and thus providing more space for the local development.

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