Study traces China’s stumbling economic growth to the deployment of fiscal stimulus through local financing vehicles after the 2008 financial crisis
The looser financial constraints of local financing vehicles — off-balance-sheet companies that potentially obscure debt loads — led local governments in China to invest not just in infrastructure but also in their favorite private firms. This damaged the efficiency of the allocations, a compromised approach that continued well beyond the 2008 financial crisis, according to a new study.
China in 2 minutes a day
More from SupChina
Friday, March 24
Mar 24, 2017