Fiscal reform ‘to reduce deficits’
China’s ongoing intra-governmental fiscal reform will reduce local government deficits, rating agency Moody’s said. China’s central and local governments must spend their fiscal revenue on public services. However, this puts pressure on some local governments, particularly those in poor areas. Last month, the State Council announced that by 2020 it would clarify budget responsibilities by reclassifying all fiscal expenditures into three groups — central government, local government, and both local and central.