Journal
EURASIAN GEOGRAPHY AND ECONOMICS
Volume 52, Issue 5, Pages 686-711Publisher
ROUTLEDGE JOURNALS, TAYLOR & FRANCIS LTD
DOI: 10.2747/1539-7216.52.5.686
Keywords
Chinese political economy; land management system; infrastructure boom; leveraging; structural imbalances; local financing platforms
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A noted Hong Kong-based economist addresses the emerging financing problems prompted by debt-laden local governments in China in the aftermath of the global financial crisis. More specifically, using the most recent data available, he traces the root of China's local debt overhang to a protracted debt-financed infrastructure investment boom in which several key institutions (the cadre evaluation system, the land management regime, and the banking sector) have created an environment that draws local governments into a land-infrastructure-leverage trap. The author argues that the resulting high levels of debt may ultimately impede the country's efforts to mitigate structural imbalances in its economy. Journal of Economic Literature, Classification Numbers: H600, H700, P200, P300. 3 figures, 9 tables, 121 references.
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