Budget Law and local needs

Huang Jianchu, a senior member of the Budgetary Affairs Commission of the Standing Committee of the National People's Congress, recently shared with reporters his idea of strengthening local People's Congresses' supervision of local government debts to avoid risks.

That is a good way to regulate local government debts and prevent them from growing out of control, but it requires systemic reform that includes revision of the Budget Law, says a 21st Century Business Herald commentary.

A dilemma exists for China's local governments as the current Budget Law does not allow them to raise debts, yet they still need funds to meet their responsibilities. Because of this, it is common practice for local governments to raise funds through the enterprises under their control. That is the key reason why many local People's Congresses cannot implement effective supervision over the debts.