US expert optimistic about local debt
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.”