Arthur Kroeber
Arthur Kroeber

The reform plans from president Xi Jinping asks for a notable reshuffle of power relations in China, notably from the powerful local governments to the central government. It  takes “brute force”, says economist Arthur Kroeber in Bloomberg to reorganize local finances.


Tightening control over local finances and allowing new channels for funding would limit the risk of a debt crisis hobbling the world’s second-biggest economy, while corruption arrests since Xi became party chief may signal that officials ignore directives at their peril. The scale of regional debt woes is set to be shown in an audit that the Finance Ministry said was due last month although it has yet to be released.

“It requires a lot of political brute force and it’s something you can only achieve if you are extremely vigorous,” said Arthur Kroeber, Beijing-based managing director of economic research firm GaveKal Dragonomics, referring to efforts to ensure local governments toe the line. “The localities have so much power and their incentives are so non-aligned with the party’s grand objectives that it’s a real problem.”

The anti-corruption campaign started by Xi when he took over as party chief last year may be a way of telling officials and state-company bosses, “Look, this is the way it’s going to be, and if you don’t like it, we have a lot of space in the jails for you,” said Kroeber, who is also a fellow at the Brookings-Tsinghua Center for Public Policy in Beijing.

 More in Bloomberg

Arthur Kroeber is a speaker at the China Speakers Bureau. Do you need him at your meeting or conference? Do get in touch or fill in our speakers’ request form.

China Weekly Hangout

The Third Plenum

Labor camps, the one-child policy, hukou’s, pollution, internet censorship, state-owned companies, energy policy: they are just a few of the subjects that appeared last week in the 21,000 character document released after the Third Plenum of the Communist Party, spelling out reform plans for the coming years.

The +China Weekly Hangout plans to discuss some of those plans and will ask panelist whether the Third Plenum did bear a mouse or an elephant. Pending a few logistical challenges, we will hold our online meeting on 21 November at 10pm Beijing time, 3pm CET and 9am EST. We will pick subjects, depending on the expertise of the people joining us on Thursday, and summarize with the question how likely it is president Xi Jinping will pull off the planned reforms.


What can China learn from Singapore in sustainability, we asked Our sustainability expert Richard Brubaker from Shanghai on October 21. He explains what features in sustainability in Singapore could be applied in China too, and what it takes to get it done. Moderation by Fons Tuinstra of the China Speakers Bureau.

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