It took that much local debt expansion (deficit spending) to support the economy they’ve had.
Supporting said local expansion supports said growth and backing off removes that support.
China Local Debt May Top Estimates, Former Minister Says
April 7 (Bloomberg) — Local Chinese governments may have more than 20 trillion yuan ($3.2 trillion) of debt, exceeding the official estimates, former Finance Minister Xiang Huaicheng said at the Boao Forum for Asia.
Xiangs estimate for provincial and city government borrowings is almost double the 10.7 trillion-yuan figure that the National Audit Office gave for such debt in a 2011 report. The combined debt of Chinas central and local governments may currently be more than 30 trillion yuan, said Xiang, who served […]