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by worrycue 1040 days ago
This isn't their only problem though. Local Government Financing Vehicles are also having trouble servicing their debts - the only way they make money is leasing out land but the real estate sector had imploded. One of their biggest lenders, Zhongrong International Trust Co. also just failed to make payments.

Their economy seem to be swimming in bad debt.
1 comments
bohadi 1040 days ago
local and provicial governments really dont matter. they do their best to support and bid projects for national champions and siting direct foreign investments where competitive. the areas which outperform (do least bad) have their executive talent siphoned to the central government. as FDI has dried up in the global slowdown restructuring and local reforms are due. one idea is to heavily lean on consumption which is palatable to some. i dont see that the chinese (or the japanese) feel that is a tenable path however
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worrycue 1040 days ago
> local and provicial governments really dont matter.

Local governments are broke though and their LGFVs owe people a lot of money and can't pay.

The central government I believe is bailing them out - handing out longer term loans to kick the can down the road. It's still a strain on their financial resources.

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