(Yicai Global) Sept. 20 -- China's local economies and finances will continue to improve in the second half of this year as the overall economy and property market stabilize, Moody's Investors Service said in a report.
Local government tax and non-tax revenues will keep rising over the next few quarters, the report said. Moody's expects revenues from the sales of land use rights to keep growing and the property market to continue to stabilize. The finance ministry's debt swap scheme could cut local government borrowing costs by an average of four to five percentage points, it said.
Regional fiscal and economic conditions will differ substantially, however, and provinces heavily reliant on industries with excess capacity such as steel, coal and manufacturing will continue to face heavy pressure, the report said.
Moody's said that although growth supported by stimulus measures appears likely to reduce risks in the short term, it is unlikely to solve the problem of uneven growth across regions, and will likely increase the costs of structural adjustments in the long-term.