Understanding local government debt in China

Oct 18, 2023, 07:52 AM

How can China navigate the country towards a more sustainable and balanced economic future?

China's growth model, marked by excessive investment and a high savings rate, has led to the accumulation of local government debt and a skewed balance between consumption and investment.

In this episode of The Sound of Economics, Giuseppe Porcaro and Alicia García-Herrero explore this debt burden with Michael Pettis, exposing the structural problem in China’s growth model which over-relies on investment.

This episode is part of the ZhōngHuá Mundus series of The Sound of Economics. ZhōngHuá Mundus is a newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe. Sign up now to receive it in your mailbox!