Multilevel Financing of Sustainable Infrastructure in China by Ehtisham Ahmad published by LSE/ Grantham Research Institute (4/2021).
“Generating employment in compact, clean and connected cities and regions in the interior is a central part of the “dual circulation” proposal in the 14th Five Year Plan and Perspective Plan (#17, PR China, 5th Plenary 2020—(PRC 2020)). But it was also a feature in the “rebalancing” Western Development Strategy almost two decades ago. In determining the policy measures needed to meet the goals of addressing goals of reducing inequalities (#30, PRC 2020) and peaking net emissions by 2030 (#35, PRC2020) to achieve China’s commitment of net-zero carbon emissions by 2060, it is important to focus on human, social, and natural capital along with financial returns; and use the same considerations in designing tax and financing mechanisms. This will influence incentives facing local governments to provide essential public services and infrastructure to enable appropriate investment location decisions by firms, job search and migration choices by workers. Multilevel finance decisions play a critical role in determining responsibilities, financing and governance needed to generate new sustainable “hubs” as part of the envisaged rebalancing…”
