Understanding local government debt in China

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

Publishing date
18 October 2023

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.

Click to read all past editions of ZhōngHuá Mundus

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This is an output of China Horizons, Bruegel's contribution in the project Dealing with a resurgent China (DWARC). This project has received funding from the European Union’s HORIZON Research and Innovation Actions under grant agreement No. 101061700.

Co-funded by the European Union

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