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.
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 […]