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Contra News & Views

How “Mr. Dig Dig” Buried Wuhan In Debt: Local Government Financing Vehicles Are At The Heart Of China’s Ponzi

Roughly 8,000 local-government-financing firms across China are responsible for the rapid development of cities but also the glut of housing, industrial parks and other projects economists and officials say threaten China’s economic health. “If you’re building projects that can’t cover their cost, you’re spending money on keeping them going,” says Mr. Howie. “Some hospital somewhere isn’t being built; some small company isn’t getting money.”