Annual Lecture: China’s COVID Response & the State of Local Finance in the Xi Jinping Era

September 24, 2021 9:00 am - 10:30 am

Event Organizer

China Center for Poverty and Social Policy


Presenter: Christine Wong, Visiting Research Professor, East Asian Institute, National University of Singapore; Visiting Chair Professor, Schwarzman Scholars Program, Tsinghua University

Commentator: Carl Riskin, Senior Research Scholar and Adjunct Professor of Economics, Weatherhead East Asian Institute; Distinguished Professor, CUNY Queens College

Moderator: Qin Gao, Professor and Director of China Center for Social Policy, Columbia School of Social Work

In China’s decentralized fiscal system, since virtually all vital public services such as education, healthcare, and social welfare are provided by local governments, a well-functioning intergovernmental fiscal system is essential to ensure local governments have adequate incentives and resources to perform their role. Since 1978, China has overhauled its public finances to create a system able to finance government operations, support economic growth, and supply revenues for the government’s ambitious industrial policies and international initiatives. The COVID-19 pandemic has posed new challenges to China’s public finance that are likely to continue in the years to come.

This lecture provides an update on local finance through three decades of reform including those implemented since 2013, when a comprehensive package was announced, with promise of a realignment of central-local revenues and expenditures by 2020. The findings are that local fiscal status has deteriorated since 2015 due to a combination of slowing growth, tax cuts, and reform pressures. This has already led to a decline in social spending as a share of GDP, threatening to reverse some recent gains in improving public services and undermining other policy goals.

This event is part of the 2021-2022 lecture series on “COVID-19 Impacts and Responses in China and Beyond” and is co-sponsored by the Weatherhead East Asian Institute.