China is attempting to defuse risks from its $9 trillion pile of off balance-sheet local government debt, without resorting to major bailouts.
That path forward is a treacherous one for President Xi Jinping’s government. To thread the needle, the provinces and cities whose borrowing drove the world’s largest infrastructure boom will need to roll back their spending and restructure debt — all without drastically dragging down economic growth. If they fail, it could thrust the world’s second-biggest economy into a prolonged malaise.
WATCH: China’s Local Debt Problem
Source: Bloomberg
At the center of this dilemma are local government financing vehicles, companies set up across ...
