Victor Shih
@vshih2
Ho Miu Lam Chair Professor at GPS of UCSD. Expert of Chinese elite politics, economy, and finance. RT does not mean endorsement.
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If central transfers (subsidies) do not keep pace with expenditures, which they haven’t, you will have debt increase. Interestingly, after scraping over 70,000 bond issuance records, which gives us monthly data on debt servicing and increases, we find that since 2022, debt increase has been driven by special purpose bonds, issued out of local extra budgetary accounts, to make up for shortfalls in land income. By the way, this shows that just bond-based local debt almost has reached 70 trillion RMB, or 50% of GDP. We are not counting the LGFV loans. (2/N)
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I hung on to his every word as a grad student and wrote half of my dissertation on his financial policy. He was more reform minded than the current leaders and promoted some genuinely reform minded officials. But he was a statist through and through who helped make SOEs larger and stronger and with the help of American ibanks, recapitalized state banks so they were able to finance the industrial policies of the past decade. One thing is for certain though: he was a pivotal leader
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