Bond issuance to relieve local government burdens
December 18, 2008 | BY
clpstaff &clp articles'Breakthrough' plans offer hope for authorities
Local authorities are facing a decrease in government revenues due to economic pressures in the coming year. A new government proposal to allow them to issue bonds could provide them relief.
Government revenues, such as tax, land fees, and central government subsidies, are already declining in some regions and are expected to decline further. As local authorities mainly rely on central government revenue to finance their expenditure, bond issuance would certainly help to alleviate financial burdens on local governments, said Hubert Tse, managing director and head of Yuan Tai PRC Attorneys.
“It would be a breakthrough if the State Council passes the draft. The law would provide local governments with a useful and much needed channel for financing,” Tse said.
The draft of the Tentative Regulations for Strengthening the Administration of Local Government Debts has reportedly been submitted to the State Council. The first bonds are expected to be issued within one or two years.
This premium content is reserved for
China Law & Practice Subscribers.
A Premium Subscription Provides:
- A database of over 3,000 essential documents including key PRC legislation translated into English
- A choice of newsletters to alert you to changes affecting your business including sector specific updates
- Premium access to the mobile optimized site for timely analysis that guides you through China's ever-changing business environment
Already a subscriber? Log In Now