In most countries, the revelation that local governments would default on a fifth of their bank loans would be greeted with alarm. In China, however, the news came as a pleasant surprise.
“The fact that nearly 80 per cent of those projects have at least some capacity to service their debt is quite amazing,” said Qu Hongbin, chief China economist at HSBC.
There is more here. This is in large part an aftermath of the Chinese plan for economic stimulus and some comentators have suggested that more of the stimulus should have been run through the national government.