惠誉评级：2025中国地方和区域政府手册（英文版）（16页）.pdf

1、 Handbook 5 September 2025 1 Public Finance Local and Regional Government China China Local and Regional Government Handbook Distinct,Complex and Dynamic Fiscal Framework Handbook 5 September 2025 2 Public Finance Local and Regional Government China China Local and Regional Government Handbook Disti

2、nct,Complex and Dynamic Fiscal Framework Decentralised Expenditure and Debt Chinas local and regional governments(LRGs)exhibit significant vertical fiscal imbalances.They are responsible for 90%of total expenditure,but only collect 74%of total revenue.This gap is not fully covered by central transfe

3、rs,necessitating debt financing.LRGs represent 58%of Chinas general government debt,including central and local government liabilities.They also use local-government financing vehicles(LGFVs)for quasi public-sector investment,which can further increase LRGs debt stock and contribute to general gover

4、nment debt if the debt is ultimately serviced by fiscal funding.Revenue and Expenditure Mismatch Chinas LRGs categorise budgets by function,such as public administration and transport,rather than by economic classification,for instance,salaries or investment.This creates ambiguity between operating

5、and capital accounts.Fitch Ratings reclassifies LRG budgets based on economic nature in its analysis,rather than relying on Chinas classifications,where the general public budget(GPB)is seen as an operating budget and government-managed funds(GMF)as capital.Unlike other LRG frameworks,Chinese LRGs c

6、an transfer funds from the GMF to the GPB,which can undermine fiscal sustainability.However,this mismatch is mitigated by the generally robust expenditure adjustability of Chinese LRGs,as the share of inflexible costs,including education,social security,unemployment,healthcare and public safety,is c