The World Bank has warned that Chinese local governments remain addicted to off-budget borrowing, despite Beijing’s efforts to impose fiscal discipline on localities and curb ballooning debt. Runaway growth of local government debt is widely seen as a huge risk for China’s economy and financial system. Provinces, cities and counties borrowed heavily to spend on infrastructure to keep economic growth humming after the 2008 financial crisis, financed through local government finance vehicles (LGFV). Economists warn that returns on new infrastructure investment are falling and white elephants are common. But despite controls, LGFV debt has actually accelerated since 2015, the World Bank warned in a confidential March presentation obtained by the Financial Times. Growth of LGFV liabilities accelerated from 22% in 2014 to 25% in 2015 and stayed high at 22% in the first half of 2016, the authors found.