Stake-holder Firms and the Reform of Local Public Finance in China

Publication Date
Systemic Risk Centre Discussion Papers DP 108
Publication Date
Financial Markets Group Discussion Papers DP 827
Publication Authors

Since 1978 China has developed strongly using a particular form of capitalism which has relied upon close relations between private enterprise and the state and the continuing presence of state-owned enterprise, both centrally and at local levels. This model has been criticised as being responsible for the rapid rise of debt since 2010 and the slow-down of growth more recently. Using examples taken from Guangdong Province in south China I illustrate the workings of this system and highlight the challenges to adapting it to support China's growth ambitions for the coming decades.