The implosion of China’s hidden debt

Monday 11 September 2023

JPM with a neat, potted history of the LGFV problem.

China’s LGFVs: How did we get here?

Local government hidden debt emerged after the “4-trillion” stimulus in 2008. Under the 1995 Budget Law, local governments were forbidden to issue bonds, borrow or incur deficits.

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About the author

David Llewellyn-Smith is Chief Strategist at the MB Fund and MB Super. David is the founding publisher and editor of MacroBusiness and was the founding publisher and global economy editor of The Diplomat, the Asia Pacific’s leading geo-politics and economics portal. He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.