Tackling local government debt

Solution to potential crisis lies in deepening reform of the tax distribution system and expanding revenue sources

The total amount of local government debt in China has been a sensitive and contentious issue for a long time, and the true figure is still not clear.

But what is even more important than the numbers is the fact that risks do exist. It is high time that China accelerated the comprehensive management of local governments' debts, in order to avoid these debts being transformed into a debt crisis or bank crisis, which has happened in some developed countries.