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New York Times: China's Debt Monster

July 7, 2011


In light of a recent slowdown in China's economic growth, a coterie of China commentators at the New York Times discusses the question of whether massive public spending is contributing to an incipient debt crisis.

China's booming economy has been showing signs of slowing down in recent months. Some economists say this is linked in part to rising levels of local government debt, which is the result of aggressive spending for projects like new airports, business districts or high-speed railways. These ventures have helped China modernize and prepare for future growth, but are financed through borrowing and complex accounting techniques that hide the true size of the debt.

Is China's spending on huge public works a worthwhile investment, or does the accumulating debt pose a threat to the Chinese economy?

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