Debt of Local Governments of China: Assessment Issues and Analysis

Abstract

The article discusses the problems and methods of overcoming the financial debt of local authorities in China. Difficulties of their solution are noted, due mainly to the inconsistency of short-term bank loans with the long-term needs of the implementation of local infrastructure projects. The measures taken by the country’s leadership to alleviate the burden on regional budgets were analyzed: providing the opportunity to convert part of short-term debts into long-term debts by issuing special bonds of local governments and reallocation of part of the special expenses of the local budget to the central budget.