A framework for fiscal reform is set to emerge from this month’s gathering of Communist Party leaders but concrete measures are unlikely, according to a senior researcher at China Construction Bank International Securities Ltd. (CCBI).
Eliza Liu, director and deputy head of CCBI’s research division, said Wednesday that the general trend of the reform will be for the central government to relieve local governments of the burden of providing social benefits while allowing the lower-level authorities to raise tax income.
Local governments will also be allowed to issue long-term municipal bonds in 2014 or 2015, but the local authorities would be reluctant to let the public scrutinize them when issuing the bonds, Liu said.
She said Beijing has recognized the need for changes in budgeting to ensure more careful planning and better official supervision, but major advances on this issue are three to five years away because of the complexities involved.
Liu also said the leaders were unlikely to unveil specific measures at the plenum for turning agricultural land into commercial property because of the huge potential impact it would have on land supply and property policy. She said concrete progress on this issue will only happen in 2015.
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