China to Local Officials: Curb Debt or Face Demotion!

The battle for fiscal restraint just got personal

  • Share
  • Read Later
ChinaFotoPress / Getty Images

China’s Communist Party has warned local officials to keep their budgets balanced or kiss their career ambitions goodbye.

A party memo, published by the state-run Xinhua news agency, informed public officials that a new measure of success, government indebtedness, would supplant the old measure, economic growth. Promotions will go to the fiscal hawks and demotions to the spendthrifts.

According to the South China Morning Post, the memo warned in no uncertain terms that the party “will keep a record of those who cause wasteful use of natural resources, create a serious impact on the ecology and leave behind bad debt because they borrow blindly.”

The new job performance measure could stanch the flow of yuan into flashy infrastructure projects, which threaten the solvency of municipalities across China.