Tag Archives: local governments

Sustainable development and local officers’ promotion

Last year, the National Bureau of Economic Research published an interesting working paper1 on the possible correlation between local government officials’ promotion and environmental policies.

Since environment has become a key issue on China’s national agenda, this question needs to be addressed as a priority at the local government level. However, it seems that local officials who are most active in environmental issues are not the ones who are most promoted.

In this paper, the authors2 introduce the merit-based promotion system of Chinese officials and its expected effects on inter-provincial competition. They also point out that China’s fiscal system heavily relies on local governments to finance social welfare and the construction of infrastructure.

According to the authors, local officials are keen to develop the territories they are in charge of, by investing in transport and obtaining high GDP rates, so they can be promoted more quickly.

This paper also highlights the correlation between the improvement of transport infrastructures and land prices, and the impact of land prices on local officials’ career.

The research shows that improving environmental standards has no impact on the careers of local government officials. Achieving strong economic growth still remains the main priority for local officials who wish to get a promotion.

The authors suggest a reform of China’s merit-based system by including the environmental dimension in the officers’ promotion process.

  1. Wu, J. et al (2013, February). Incentives and outcomes: China’s environmental policy. NBeR Working paper Seies  18403. National Bureau of Economic Research. Retrieved 26 January, 2014 from http://www.ires.nus.edu.sg/workingpapers/IRES2013-004.pdf []
  2. Wu Jing, Deng Yongheng, Huang Jun, Morck Randall and Yeung Bernard []

Sebastien Goulard

Ph.D. in political science (EHESS, Paris); M.A. in social sciences (EHESS, Paris); M.A. in international relations (IRIS, Paris), B.A. (Hons) in international political studies (ESE - Nottingham Trent University)

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Urbanization: a tool to reduce inequality?

China’s new populist urbanization

Since Li Keqiang was tipped to succeed Wen Jiabao as China’s premier, analysts have been trying to come to a better understanding of Li’s thoughts on urbanization. This is because Li has prominently identified urbanization as the growth engine of the Chinese economy and one of the main focuses on the new administration.

Li’s first press conference as premier this past weekend helped shed a bit of light on what urbanization (城镇化) might mean in terms of policy. Premier Li’s description of urbanization focused on the issue of inequality, both between poor and rich within cities and the urban and rural areas across China. The solution, according to Premier Li, is to better integrate migrant workers into cities and to spread urbanization out into the smaller cities and less developed regions of the country. This activity will generate significant new investment opportunities and raise domestic consumption levels helping to rebalance the Chinese economy.

This represents a profoundly populist spin on urbanization, which has historically been one of the primary drivers of inequality in China. Read more

Will municipal bonds save China’s urbanization plan?

Increasingly China’s new leadership has revitalized the topic of urbanization. Last November, the vice-premier, Li Keqiang, wrote an article calling urbanization a “huge engine” for future economic growth. More recently, the newly released income inequality plan has even described urbanization as a tool to reduce income inequality.

This renewed emphasis on urbanization appears to have re-opened the topic of financing local infrastructure projects. In the fourth quarter 2012 monetary policy report released earlier this month, the Peoples Bank of China (PBC) wrote an exhibit entitled “the international experience of financing construction for urbanization.” In this exhibit, the Peoples Bank observed a strong correlation between urbanization and municipal bonds across countries from the 1950s to today. They found that the use of municipal bonds backed by tax revenues was the most effective tool for supporting urbanization “no matter whether you have a federal or centralized system of government.” Read more



Monique Abud

Centre d'études sur la Chine moderne et contemporaine, EHESS, Paris, France

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