Professor of Economics, Associate Dean for Asia and Europe, Director of the Case Center, Director of China Economy and Sustainable Development Center
PhD, University of Michigan
Corruption, Financial Markets, Macroeconomics, Managerial Incentives and Market Competition, Real Estate, Reform, Taxation, Telecommunications Privatization, Valuation in Emerging Markets
Debt is a ticking-time bomb for the Chinese economy. In the past three years central government stopped local governments from financing through investment vehicles and set a cap for the issuance of bonds. But new forms of debt continue to be formed. Local officials appear not to care about borrowing more, as long as the money can be used in projects that may translate to political achievements. And with those achievements, officials will be promoted to a higher level–as will the debt burden. A more worrisome thought will be: can those additional government debts and investments support China’s long-term growth?