(Yicai) Nov. 24 -- China should increase the share of fiscal spending by the central government, as measured by the general public budget, and strengthen its responsibilities and decision-making authority over the next five years, according to the recently released official recommendations for the country’s 15th Five-Year Plan.

The move aims to promote high-quality economic development and ease the financial pressure on local governments, which have been contending with weak fiscal revenue growth and a heavy debt burden in recent years.

Central government spending accounted for around 14 percent of general public budget expenditure over the past decade, while local governments shoulder the rest, Yicai calculated. Despite that, localities receive only about half of the national general public budget revenue, with the gap mainly filled via transfer payments from the central government and local debt financing.

The high share of expenditure borne by local governments combined with a steep fall in property marklet-related revenue has led to local financial difficulties, Luo Zhiheng, chief economist at Dongxing Securities, told Yicai. While big central government transfers are necessary, they are insufficient to fully meet spending needs, forcing localities to rely on explicit and implicit debt to bridge the fiscal gap, he said.

Former Finance Minister Lou Jiwei wrote in a recent article that there is a clear imbalance in the fiscal relationship between the central and local governments. In member countries of the Organisation for Economic Co-operation and Development, national government spending accounts for on average 61 percent of total public expenditure, significantly higher than in China, Lou pointed out.

The central government’s share of fiscal spending should ideally rise to 30 percent to 40 percent by 2030, according to Liu Shangxi, a researcher at the Chinese Academy of Fiscal Sciences. "This would improve governance efficiency, reduce administrative costs, and help solve problems that local governments struggle to address,” he said.

Central government spending reached CNY3.47 trillion (USD488.2 billion) in the first 10 months of this year, accounting for about 15.4 percent of total public budget expenditure, compared with 14.8 percent in the year-earlier period, according to the Ministry of Finance.

Editor: Martin Kadiev