When the current crop of Chinese leaders assumed power, they wasted no time in ordering an extensive audit of local government debt. Presumably the new team, led by President Xi Jinping, wanted to know what everyone else wants to know: How has China’s massive expansion of credit since 2008 affected state finances?
The uncomfortable truth is that nobody has a great handle on exactly how much local governments have spent.
The bean counters are still working overtime in the provinces to get Beijing an answer on local debt levels, with a report likely due by the end of the year. But in the meantime, the warnings from some private forecasters are getting downright scary.
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