US ex­pert op­ti­mistic about lo­cal debt

China Daily (Canada) - - NEWSCAPSULE -

Some US ex­perts are op­ti­mistic about China’s grow­ing lo­cal gov­ern­ment debt.

China’s Na­tional Au­dit Of­fice re­ported in De­cem­ber that lo­cal gov­ern­ment debts had grown to about $3 tril­lion by the end of June 2013, up about 70 per­cent from the about $1.8 tril­lion at the end of 2010.

Ni­cholas Lardy, a se­nior fel­low at the Peter­son In­sti­tute for In­ter­na­tional Eco­nom­ics, is one of the op­ti­mists. He said the bulk of the debt, which has been on mu­nic­i­pal con­struc­tion, such as trans­porta­tion, hous­ing and wa­ter, and some on sci­ence and en­vi­ron­men­tal pro­tec­tion, is a good thing.

Derek Scis­sors, a res­i­dent scholar at the Amer­i­can En­ter­prise In­sti­tute, said the prob­lem is the mount­ing cor­po­rate debt, which he called “dan­ger­ous.”

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