local government financing vehicles (LGFVs)

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.