The Division of Responsibility and Authority for Chinese Local Government Debt:Practices and Suggestions

Abstract

Division of responsibility and authority for local government debt is an important part of decentralized public finance management system.It has become a precondition to legitimize local government debt in order to solve the current problems in our country.Legitimizing is to identify not only debt-financing rights,but also debt management responsibilities.Local governments have made some explorations about it in recent years.Central government should grant legal borrowing right to local governments,but the debt amount and its using should be strictly controlled.The uniform management agencies should also be set up in Ministry of Finance and public finance departments at province,city and county.