Economics
China Returns to Old Construction Playbook to Boost Growth
- Local governments are issuing record amounts of special debt
- Much of the money is for construction, Bloomberg study shows
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China is returning to its stimulus playbook, with local governments borrowing a record amount to spend on infrastructure this year to drag the economy out of its coronavirus- induced slump.
In past stimulus cycles -- such as after the global financial crisis -- China splurged on roads, airports, and railways, and racked up huge debt. For the past few years, much of this spending has been funded by bonds tied to projects that are meant to make enough money to repay the debt.