Local governments' borrowing binge contributes to mounting debt

Heavy borrowing by local governments in China has resisted central authorities’ attempts to clamp down on their rapidly rising debt, which is expected to grow from 36% of GDP in 2013 to 52% in 2019, The Wall Street Journal reported, citing estimates from the International Monetary Fund. The roughly 8,000 local-government-financing firms through which localities borrow indirectly are responsible for the rapid development of cities in China, but also for the glut of housing, industrial parks and other projects economists and officials say threaten the country’s economic health.