If a politician in China is saying this, you have to wonder how much worse it really is. Overcoming a financial hurdle like this won’t be easy, even for China. Reuters:
Billions of dollars of debt racked up by local Chinese governments during their investment sprees are likely to sour as the projects they finance near completion, Yin Zhongqing, a prominent Chinese lawmaker, said this week.
In an interview with Reuters Insider, Yin said local governments had incurred at least 10 trillion yuan ($1.5 trillion) of “hidden” debt, which they have concealed by creating thousands of investment vehicles that serve as borrowers.
Yin said it is not yet clear which loans will sour because they do not have to be repaid until the projects are completed.