China vice-premier signals reform to reshape central-local finances amid funding pressure

China's vice-premier, Ding Xuexiang, has signaled plans to reform the country's central-local finances, aiming to address funding pressure on local governments. This move comes as China's economic growth slows and land-transfer proceeds, a key source of local revenue, decline. The reforms aim to rebalance fiscal ties between the central and local governments, potentially alleviating financial strain on local authorities.

Why it matters

China's reform signals easier funding for local governments. That could lift investor confidence and reduce default risks.

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