2/6
But who should take the blame? "Former finance minister Lou Jiwei said in March that it is not accurate to believe that hidden debt problems emanated from Beijingโs push for costly infrastructure projects at local government levels."
But who should take the blame? "Former finance minister Lou Jiwei said in March that it is not accurate to believe that hidden debt problems emanated from Beijingโs push for costly infrastructure projects at local government levels."
3/6
I disagree. The surge in local government debt was a necessary consequence of excessively high GDP growth targets, but I suspect Lou's comments are part of a political push by Beijing to force local governments to resolve their own debt problems without Beijing's aid.
I disagree. The surge in local government debt was a necessary consequence of excessively high GDP growth targets, but I suspect Lou's comments are part of a political push by Beijing to force local governments to resolve their own debt problems without Beijing's aid.
4/6
Lou also said: "In addition to effectively curbing the rise in hidden debt of local governments and actively resolving the existing debt problems, fundamental reforms in the division of powers and expenditure responsibilities are required."
Lou also said: "In addition to effectively curbing the rise in hidden debt of local governments and actively resolving the existing debt problems, fundamental reforms in the division of powers and expenditure responsibilities are required."
5/6
Here I full agree and think this is the key point. The real issue about who absorbs the cost of debt is about "fundamental reforms in the division of powers and expenditure responsibilities". That is why it is so difficult.
Here I full agree and think this is the key point. The real issue about who absorbs the cost of debt is about "fundamental reforms in the division of powers and expenditure responsibilities". That is why it is so difficult.
6/6
If local governments are forced to absorb the full adjustment costs, this will seriously weaken local business, financial and political elites while further strengthening the central government.
If local governments are forced to absorb the full adjustment costs, this will seriously weaken local business, financial and political elites while further strengthening the central government.
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