CITIC Securities says as land-sale fiscal revenue wanes, Chinese local governments will seek new funding sources and equity-based fiscal policy could provide incremental financing. It splits equity fiscal into primary-market operations—local authorities using guidance funds to co-invest in the primary market to capture long-term capital appreciation—and secondary-market channels—central and local SOE dividends and market-value revaluation to deliver near-term proceeds. Referencing overseas exper

CITIC Securities says as land-sale fiscal revenue wanes, Chinese local governments will seek new funding sources and equity-based fiscal policy could provide incremental financing. It splits equity fiscal into primary-market operations—local authorities using guidance funds to co-invest in the primary market to capture long-term capital appreciation—and secondary-market channels—central and local SOE dividends and market-value revaluation to deliver near-term proceeds. Referencing overseas experience, CITIC says equity fiscal can only play a larger role if overall equity market capitalization rises substantially; enlarging the equity market and sustaining a slow bull market are therefore strategic priorities, which should enhance A-shares’ long-term allocation value.