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China’s local governments have long been the engines of its economic miracle, and their ailing finances have been a drag on growth and the delivery of fiscal policy in the past few years. Under China’s decentralized system, local governments drive 85% of public spending and over 80% of infrastructure investment.  A decade-long fiscal erosion, the recent collapse in land revenues, and soaring debt have left them struggling to meet spending needs. These challenges stem from deep structural issues—a tax structure that lags behind economic changes, an overreliance on land sales to fund infrastructure and debt repayment, and a misalignment between spending responsibilities and fiscal capacity.  While recent debt relief measures have provided some breathing room for local governments, they fail to address the root causes. Bold reforms will be needed to close the fiscal gap, revise how revenues are shared, and realign revenues with spending.  They are all the more urgent given China’s rapidly ageing population and the looming expenditure needs in health and pensions. 

ºÚÁÏÌìÌà the Speaker

Christine Wong is currently Distinguished Visiting Fellow at the Australian Centre on China in the World, Australian National University.  She is also Honorary Professorial Fellow at the Asia Institute, University of Melbourne; and Non-Resident Senior Fellow at the East Asian Institute (EAI), National University Singapore.

Christine has held teaching and research positions around the world, including – from most recent - National University of Singapore (2020-January 2026), Schwarzman Scholars Program, Tsinghua University; University of Melbourne, University of Oxford, the University of Washington, University of California – Santa Cruz, and Mount Holyoke College. In addition, Christine has held senior staff positions in the World Bank and the Asian Development Bank, and worked with many other international agencies including the IMF, OECD, and UNDP.

Christine has written widely on China’s public finance and public sector reform. Her current research focuses on the impact of fiscal decentralization on macroeconomic management, and policy implementation in education, health, social welfare, environmental protection, and urbanization.

The ºÚÁÏÌìÌÃChina Seminar Series is supported by the Australian Centre on China in the World at ºÚÁÏÌìÌÃCollege of Asia and the Pacific. 

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