Core Insights - The central economic work conference highlighted the need to address local fiscal difficulties for the first time, emphasizing the importance of ensuring basic public services and financial sustainability at the local government level [2][6]. Group 1: Fiscal Conditions - There is a significant disparity in fiscal self-sufficiency among local governments, with an average fiscal self-sufficiency rate of approximately 38% across 2,774 county-level regions, ranging from as low as 1% in some areas to as high as 252% in others [1][5]. - Local fiscal difficulties are exacerbated by external demand pressures, insufficient domestic demand, and weak expectations, leading to increased challenges in maintaining sustainable local government finances [1][5]. Group 2: Revenue and Expenditure Challenges - Local governments face growing revenue challenges due to declining contributions from traditional industries and a slowdown in real estate and construction sectors, while emerging industries are not yet generating sufficient tax revenue [3][5]. - On the expenditure side, mandatory spending on basic public services, salaries, and social welfare continues to rise, with over 80% of local budget expenditures allocated to these areas as of November [3][5]. Group 3: Proposed Solutions - The central government plans to implement more proactive fiscal policies, potentially increasing the fiscal deficit and issuing long-term bonds to alleviate local fiscal pressures [6][7]. - Enhancing local fiscal autonomy is crucial, with recommendations to reform the local tax system, including the adjustment of shared tax ratios and the consolidation of various local taxes to improve revenue generation [7][8]. - Local governments are encouraged to optimize spending by adopting zero-based budgeting practices and eliminating inefficient expenditures to improve fiscal sustainability [8][9].