Audit Finds Chinese Provinces Raiding Pensions as Local Debt Swells Toward GDP Size

Chinese auditors say provinces siphoned billions from pensions, school and farm aid, highlighting a local debt crisis that now rivals half of China’s economy.

Hu Axiang, 88, receives her first pension at her home in Shanghai, China, on Sept. 28, 2006. China Photos/Getty Images

News Analysis

China’s auditors say local officials have been raiding pension accounts, school budgets, and farm aid funds to keep the lights on and service a mountain of local debt. Borrowing is now estimated at more than half the size of the national economy, according to research by global banking group BBVA.