The danger, experts say, is that China’s municipal governments could already be sitting on huge mountains of hidden debt — a lurking liability that threatens to stunt the nation’s economic growth for years or even decades to come. Just last week China’s national auditor, who reports to the cabinet, warned of the perils of local government borrowing. — NYT
The NYT publishes the first in what will be a series of articles examining China’s system of government-managed capitalism, and the potential weaknesses that could threaten the nation’s remarkable economic growth. The first article entitled "Building Boom in China Stirs Fears of Debt Overload" explores how the current construction boom (for housing, infrastructure etc) in China's cities may signal economic trouble ahead. Primarily because the investments are usually made using debts which are frequently hidden, on the balance sheets of special investment corporations.