Local governments in China to ‘smash iron pots, sell the steel’ to stave off debt risk
Bishan district government in the Chongqing municipality will look to liquidate state-owned assets, such as buildings, land and large equipment
A local government in western China has set up a team specialising in “smashing iron pots and selling the steel” – a metaphor for liquidating its assets at all costs – to address a debt crisis at a time the Chinese economy is at a crossroads to deal with rampant fiscal risk.
Named after an expression in Chinese that describes extreme determination, the special task force under the Bishan district government in the Chongqing municipality has come under the spotlight after a screenshot of an official document announcing its creation went viral on Wednesday.
The team was formed as massive debt piles at local levels increase systematic risk in the world’s second-largest economy, offering a glimpse into how local authorities are struggling to tackle the issue amid pressure from the top leadership.
Headed by the district’s executive deputy mayor and involving the finance department and the state-owned assets watchdog, the task force is part of a broader plan to monetise government assets announced earlier, according to the screenshot.
Calls to the district’s finance department went unanswered on Wednesday, but several mainland Chinese media outlets confirmed the initiative, quoting unnamed government sources.
Using a phrase reminiscent of the Great Leap Forward campaign in the late 1950s and early 1960s, when Chinese households were mobilised to literally melt their pots to contribute to the country’s steel production, the Chongqing task force was rolled out after the expression reappeared in official narratives in the past year amid mounting debt pressure.