In China, Unweaving the Tangled Web of Local Debt

Jul 17, 2018 | 09:00 GMT
A delegate catches up on some reading during a meeting of the Gansu delegation at the National People's Congress in March 2018.

A delegate reads papers during the Gansu delegation meeting at the Great Hall of the People during the National People's Congress in Beijing on March 7. China's finance minister brushed aside persistent concerns that the country's ballooning debt could spark a financial crisis, stressing that debt levels are well within control.

(WANG ZHAO/AFP/Getty Images)

The sword of Damocles is hanging over Chinese local governments. After the 2008 financial crisis, Beijing began embracing economic stimulation as it scrambled to prop up growth and protect its near-universal employment. In doing this, the central authorities demanded that local governments bear the brunt of the fiscal and financial...

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