The biggest story of the morning: China is cracking down on local government debt.
Local government officials have long been rewarded for building and development. These policies lead to local governments running up nearly $2 trillion in debts and building countless "ghost cities" with no residents. Those days could be over.
The Chinese government will now begin penalizing local officials who run "excessively mounted" debts.
China's economy has already shown signs of slowing. This announcement could dramatically speed up the process... and have a negative effect on the industrial commodities that have soared on Chinese demand.
Local government officials have long been rewarded for building and development. These policies lead to local governments running up nearly $2 trillion in debts and building countless "ghost cities" with no residents. Those days could be over.
The Chinese government will now begin penalizing local officials who run "excessively mounted" debts.
China's economy has already shown signs of slowing. This announcement could dramatically speed up the process... and have a negative effect on the industrial commodities that have soared on Chinese demand.
No comments:
Post a Comment