Bonds, bridges, and burdens: China’s local government debt in focus
- 18 October 2024 (10 min read)
It is widely acknowledged that China’s “economic miracle” over the past three decades was largely driven by industrialisation – shifting from an agrarian economy to an industrialised one. The impressive GDP growth during this period was accompanied by rapid infrastructure development, a historic property market boom, and high demand for Chinese manufactured goods from Western economies. This was a capital-intensive process, especially for a country emerging from predominantly agricultural roots. Inevitably, debt levels surged over these decades as it invested in a new future but it suited China’s political landscape to see local governments shoulder much of this burden.
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