Local Governments Selling Assets to Pay Debt

One can debate whether tight credit conditions are intentional or coincidental, but the leadership is taking advantage of the slowdown. Why would China's leaders want to dump money on a slowing economy, when the result of the slowing economy is faster reform?

Governor of China’s Shandong Says May Sell Assets to Pay Debt

Some cities and counties in China’s Shandong may need to sell assets to repay borrowings as the eastern Chinese province seeks to pare debts accumulated by local authorities, Governor Guo Shuqing said.

The province will pay back all of its local debt, which should be less than 1.2 trillion yuan ($192 billion), Guo said during a meeting of Shandong delegates to the National People’s Congress in Beijing today.

“Overall risks are under control,” Guo said. “Some counties and cities with heavy debt will need to raise funds through restructuring and selling assets to pay off debt.”