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China’s local governments have supported growth through heavy borrowing and spending big, but their debt loads are another hurdle to China’s development.
With local authorities facing cash-flow problems, there are growing concerns about the $9 trillion LGFV debt market.
Kyle Bass warns that China’s real estate problems could result in a crash worse than the 2008 financial crisis that originated in the United States.
Beijing has turned to its default means of economic stimulus: infrastructure spending. It may not do the trick this time.
