Reassessing the Perimeter of Government Accounts in China

IMF Working Papers, December 8, 2017

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Reassessing the Perimeter of Government Accounts in China

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Bibliographic details

• Authors: Rui Mano, Phil Stokoe
• Published: December 8, 2017
• Series: IMF Working Papers
• DOI: https://doi.org/10.5089/9781484331651.001

Main argument

• China’s official general government accounts do not include off-budget quasi-fiscal spending, unlike the IMF’s augmented government accounts.
• The paper argues that the broader concept of augmented government remains relevant despite recent positive measures to separate off-budget units from the government.
• New avenues to finance public infrastructure have emerged and the paper re-defines the perimeter of augmented government to include them.
• If the recommended steps are taken, the perimeter of general government would expand relative to official statistics but would likely be narrower than where augmented aggregates place it.

Emerging financing avenues and perimeter re-definition

• Identifies Special Construction Funds as a new avenue to finance public infrastructure that should be considered when redefining the government perimeter.
• Identifies Government Guided Funds as another new avenue to finance public infrastructure that should be included in the augmented perimeter.
• The paper re-defines the perimeter of augmented government to explicitly include these new financing vehicles.

Fiscal accounting gap and relevance of augmented aggregates

• Off-budget quasi-fiscal spending remains an important source of fiscal support that is omitted from official general government accounts.
• The augmented government concept captures fiscal exposure that official statistics do not, maintaining its relevance for assessing fiscal risks and fiscal space.

Concrete steps recommended to improve China’s fiscal accounts

• Proposes specific, concrete steps to improve fiscal accounts (detailed steps are presented in the paper).
• If implemented, these steps would lead to an expanded perimeter of general government relative to official statistics, but still narrower than some augmented aggregates.

Key thematic areas covered

• Economic and financial statistics
• Economic sectors
• Expenditure
• Fiscal accounting and reporting
• Fiscal law
• Fiscal policy
• Government finance statistics
• Public financial management (PFM)
• Public investment and public-private partnerships (PPP)
• Public sector

Source: Rui Mano and Phil Stokoe, "Reassessing the Perimeter of Government Accounts in China", IMF Working Papers, December 8, 2017.

Content in this bundle

• Reassessing the Perimeter of Government Accounts in China, WP/17/272, December 2017
  • Reassessing the Perimeter of Government Accounts in China, WP/17/272, December 2017 (Markdown version)
  • Reassessing the Perimeter of Government Accounts in China, WP/17/272, December 2017 (PDF)