China's hidden local government debt soars to over $8tn

Surge in borrowing, weak land sales leave half of cities struggling to pay interest

20230614N china apartments construction

Condominiums under construction in Taiyuan, China, in January. Work has stopped at the construction site. (Photo by Iori Kawate)

IORI KAWATE, Nikkei staff writer

BEIJING -- A measure of the off-the-books debt of Chinese local governments swelled by half between 2019 and 2022, amid shrinking revenue and heavy borrowing to pay for economy-supporting infrastructure projects.

Debt held by local government financing vehicles (LGFVs) totaled 59 trillion yuan ($8.25 trillion) at the end of last year, according to a recent report from the Rhodium Group.

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