China’s local government debt crisis adds chill to success of Harbin’s ‘ice city’ tourism boom

Name: Frosty photoshoots, icy sports and winter festivals in China’s ‘ice city’ Harbin
Uploaded: 2024-03-22T13:30:22.000Z
Duration: 2 min 54 s
Description: Frosty photoshoots, icy sports and winter festivals in China’s ‘ice city’ Harbin

Harbin, in China’s northeast province of Heilongjiang, received a record breaking number of visitors over the Lunar Year holiday last month

But the economy of the region, including Liaoning and Jilin, has underperformed in recent years due to weak industrial growth and population outflows

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A child enjoys an ice slide at the Sun Island scenic spot in Harbin, Heilongjiang province. Photo: Xinhua

Amanda Lee

Published: 9:30pm, 22 Mar 2024

As China’s northeast province of Heilongjiang counts on more visitors flocking to the “ice city” of Harbin to drive up consumer demand, its prospects are trapped with a debt overhang and weak industrial growth, analysts said.

Reducing local government debt risks continues to be a policy priority for Beijing, as highlighted in the government work report during the annual National People’s Congress this month.

The economy of China’s northeast region, which also includes the provinces of Liaoning and Jilin, have underperformed in recent years.

The region has struggled with declining industrial profitability and a net population outflow, while its revenues – mainly generated from land sales – have taken a dive to exacerbate its financial problems.

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Frosty photoshoots, icy sports and winter festivals in China’s ‘ice city’ Harbin

“Property has also become a lifeline for government finances, particularly at the provincial level. At the market’s peak in 2021, almost half of total local government revenues came from land sales to developers; this revenue is used to deliver government services, fund infrastructure projects and service debt,” Moody’s Analytics said on Friday.