The article kind of assumes that you understand what these "local government financing vehicles" are. Which is probably true for the median reader of the story, but it wasn't true for me, so I went looking around for an explainer and found this from 2013:
https://www.ibtimes.com/chinas-local-government-financing-ve...In contrast to state governments in the U.S., most local governments in China are forbidden to borrow money directly.
Historically, land sales have been a large revenue source for local governments, but since the global financial crisis this revenue source has diminished. Yet local government spending, especially on infrastructure investments, has accelerated...
Detroit filed for bankruptcy with debts of $18 billion on July 18, but this is the average amount of debt for many Chinese cities. A 2012 audit of 36 local governments found $624.6 billion in debt -- suggesting there are at least a few Chinese cities with debt equal to, or in excess of, the $18 billion that sunk Detroit.
So the news is that what was understood to be ~$625 billion in debt six years ago has turned into $5.8 trillion in debt today. Which is, like, 322 Detroits.
In contrast to state governments in the U.S., most local governments in China are forbidden to borrow money directly.
Historically, land sales have been a large revenue source for local governments, but since the global financial crisis this revenue source has diminished. Yet local government spending, especially on infrastructure investments, has accelerated...
Detroit filed for bankruptcy with debts of $18 billion on July 18, but this is the average amount of debt for many Chinese cities. A 2012 audit of 36 local governments found $624.6 billion in debt -- suggesting there are at least a few Chinese cities with debt equal to, or in excess of, the $18 billion that sunk Detroit.
So the news is that what was understood to be ~$625 billion in debt six years ago has turned into $5.8 trillion in debt today. Which is, like, 322 Detroits.