Multiple reform plans to tackle government debt

A set of reform plans in the latest sweeping reform package rolled out by the Communist Party of China (CPC) last week will ease and effectively control local government's debt risks, an official said on Wednesday. [Special Report]

Yang Weimin, vice head of the office of the central economic and financial leading group, said at a briefing held by the State Council Information Office (SCIO) that the document released after the Third Plenary Session of the 18th CPC Central Committee will unleash "unprecedented" power.

Yang numerated upcoming changes in the tax and fiscal system and government financing channels that could help tackle local government's debt issues.

As part of a broader fiscal system reform, the system of local taxation will be improved, a move to secure funds needed for regional public services and other local government affairs, Yang said.

Local governments will also be allowed to widen financial channels for urban construction during the latest drive of urbanization. Solutions such as bond issue may transform previous implicit debts into direct liabilities, Yang said.

Study will be carried out about establishing a policy financial institution for urban infrastructure and housing, which will partially ease financing pressure on local governments.

Private capital is also expected to take part in infrastructure investment and operation, a boon for local governments with heavy funding burdens, Yang said.

As for social hot spots like rural land-use right transfers, Yang stressed that the land reform will insist on a few bottom lines, such as the collective ownership of rural land and a total farmland acreage of at least 1.8 billion mu (about 120 million hectares).

Yang also clarified reform plans concerning state-owned enterprises, the "hukou" system, or the household registration system, as well as other social reforms.

The Wednesday event is the first of a series of briefings to be held by the SCIO to clarify and expound the 60-point key CPC document.