09-11-2013, 02:06 PM
An interesting new rule...
Local governments should not invest in or run businesses: Li
Chinese Premier Li Keqiang urged local governments to cut red tape and stay out of running businesses, in comments published yesterday.
China’s leadership is expected to discuss ways to further simplify administration and decentralise government at the third party plenum meeting that begins today.
Intervention in business by local governments can easily lead to monopoly behaviour, and authorities should only be regulators, Mr Li said at a meeting on Nov 1.
“Henceforth, a principle of local government will be to never again directly invest in or set up businesses,” Mr Li said in the remarks published on the government’s website.
China’s local governments have long been involved in businesses, in part because of a perception among officials that speedy economic growth in their localities hastens promotions.
A mismatch of income and expenditure obligations also drives local officials to seek other opportunities to make money, such as through land sales and borrowing via financing vehicles.
“Reforming local government is of great importance for continued economic development and transformation,” Mr Li said.
“If China is to see its economic growth to date continue in the long term and to see continued healthy development, there must be transformation.” REUTERS
http://www.todayonline.com/chinaindia/ch...inesses-li
Local governments should not invest in or run businesses: Li
Chinese Premier Li Keqiang urged local governments to cut red tape and stay out of running businesses, in comments published yesterday.
China’s leadership is expected to discuss ways to further simplify administration and decentralise government at the third party plenum meeting that begins today.
Intervention in business by local governments can easily lead to monopoly behaviour, and authorities should only be regulators, Mr Li said at a meeting on Nov 1.
“Henceforth, a principle of local government will be to never again directly invest in or set up businesses,” Mr Li said in the remarks published on the government’s website.
China’s local governments have long been involved in businesses, in part because of a perception among officials that speedy economic growth in their localities hastens promotions.
A mismatch of income and expenditure obligations also drives local officials to seek other opportunities to make money, such as through land sales and borrowing via financing vehicles.
“Reforming local government is of great importance for continued economic development and transformation,” Mr Li said.
“If China is to see its economic growth to date continue in the long term and to see continued healthy development, there must be transformation.” REUTERS
http://www.todayonline.com/chinaindia/ch...inesses-li