China’s post-lockdown recovery, after taking a tragic human toll during reopening, is spurring some optimism. Last week, the International Monetary Fund raised China’s growth forecast to 5.2%, up from its October assessment of 4.4%. Observers are hopeful that the rebound will be good news for the…
China’s post-lockdown recovery, after taking a tragic human toll during reopening, is spurring some optimism. Last week, the International Monetary Fund raised China’s growth forecast to 5.2%, up from its October assessment of 4.4%. Observers are hopeful that the rebound will be good news for the global economy, too.The Chinese economy has deep-rooted problems. I wrote last year about a particularly damaging problem: local governments' lack of incentives to grow the economy.
But that was before Beijing made a subtle-yet-consequential change last year when it announced that it would take over the collection of land sales revenues and return the funds to local governments only afterward. Fast-forward to last week, when a leaked document circulated in China revealed that, in addition to not collecting the proceeds, local governments are also required to publicize each parcel of land they intend to sell at least three months ahead of time.