This paper assesses the impact of local government spending on provincial outputs in the People‘s Republic of China.

Public investment in science and technology has multiplying effects on output, which benefits long-term productivity. If excessive, fiscal deficits and public debt can weaken the benefits of expansionary policies. Differentiating the impact of specific spending components and the economic environment on the provincial output and local fiscal conditions remains challenging. Future research can explore this further with more disaggregated administrative project-level data.