Beijing vowed this month to accelerate fiscal spending, which includes allowing for the construction of new infrastructure, but local government debt still poses an economic challenge. Photo: Xinhua
Beijing vowed this month to accelerate fiscal spending, which includes allowing for the construction of new infrastructure, but local government debt still poses an economic challenge. Photo: Xinhua

China’s infrastructure plans aim to shore up economy, but experts say Beijing may first need to ease up on local debt

  • As China’s fiscal policy turns from contraction to expansion next year, infrastructure investment is expected to accelerate, but the risk of a rapid increase in debt remains
  • Financially strapped local governments have been reluctant to take advantage of special-purpose bonds, as these primarily go to infrastructure spending

Beijing vowed this month to accelerate fiscal spending, which includes allowing for the construction of new infrastructure, but local government debt still poses an economic challenge. Photo: Xinhua
Beijing vowed this month to accelerate fiscal spending, which includes allowing for the construction of new infrastructure, but local government debt still poses an economic challenge. Photo: Xinhua
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