Experts call for building policy consensus on bold fiscal reforms

It is time to build a policy consensus on China's space for bold fiscal expansion, leveraging it for deep reforms aimed at improving social welfare and accelerating the country's much-anticipated economic rebalancing, according to leading economists and policy advisers at top think tanks.

Li Daokui, dean of the Institute for Chinese Economic Practice and Thinking at Tsinghua University, told China Daily that reforming China's fiscal framework could hold the key to tackling multiple economic challenges — including local government fiscal stress, underperforming domestic demand and oversupply in some emerging sectors.

According to Li, the core problem facing the Chinese economy is the excessive debt burden on local governments, which has led them to seek short-term revenue flows such as taxes and fees on businesses and households, weighing on the consumption and investment willingness of market entities.