To maintain sustainable and healthy economic growth, local governments must transform their functions and pave the way for restructuring the economy and upgrading industries, said an article in the Southern Metropolis Daily (excerpt below).

Premier Li Keqiang pointed out in a recent conference that local government reform has come to a crucial stage given the urgent needs of China's development.

It is impossible for the governments to continue the old model of boosting economic growth with huge debt and land financing.

The main difficulty obstructing local government reform is addiction to power and revenue.

The State Council banned local governments from directly investing in enterprises recently.

The real problem in the local government system is the county governments, which do not have legal status as administrative approval authorities. Yet, in practice, many county governments grant themselves entitlements by issuing documents on their own account.

This phenomenon calls for stronger supervision from the disciplinary watchdogs of the central government and People's Congresses at various levels to force the local governments to delegate more power to society and reduce intervention in the market.

The central government should also make breakthroughs in the much-needed fiscal and tax distribution reform to match the revenue of governments to their various duties.