09/01/2026
China’s local governments have played an outsized role in the country’s economic development, but many of them face mounting debt, strained finances, and incentives that can contribute to overcapacity and resource misallocation.
On the latest episode of the East Asia Pulse podcast, Stanford political scientist Jean Oi, William Haas Professor in Chinese Politics and director of APARC’s China Program, discusses the complexities of China’s central-local government relationship and why extensive fiscal reforms are needed.
Speaking with Alfred Schipke, National University of Singapore's East Asian Institute director, Oi examines:
• How local governments have driven innovation and experimentation
• The challenges of balancing economic growth with rising local government debt
• How incentive structures can contribute to overcapacity and misallocation
• The role of local government financing vehicles (LGFVs) in generating revenue
• Why reform is needed to better align local responsibilities with revenue sources
Over the past year, while on academic leave from Stanford, Oi has served as EAI’s Goh Keng Swee Professor in China Studies.
Get the full conversation and explore the key highlights:
https://aparc.fsi.stanford.edu/news/unpacking-complexities-chinas-local-governments
Unpacking the Complexities of China’s Local Governments Breadcrumb All Shorenstein APARC News Commentary August 6, 2026 Unpacking the Complexities of China’s Local Governments Speaking on the East Asia Pulse podcast, Stanford political scientist Jean Oi, the director of the China Program at APAR...