Victor Shih(@vshih2):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)

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.

参加 August 2009

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Victor Shih@vshih2

2026.10.26 07:26

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)