percent of the national GDP at the end of 2018, a little higher than the
36.2 percent for 2017, but still much lower than the globally accepted warning level of 60 percent.
Given that the ratio is more than 200 percent for Japan and aro
und 100 percent for other major economies such as the United States and France, it is hard to un
derstand why China, with a much higher economic growth rate, is so often identified as cause for concern.
Some might point to China’s growth-obsessed local governments, which have long been criticized for their opaque ways
of raising funds to invest in massive infrastructure projects, often using financing institutions known as “local gove
rnment financing vehicles”. Much of the so-called hidden debts have been raised through such vehicles.
Yet thanks to deleveraging, the curbing of irregularities and the st
andardizing of government financing, among other measures that have been taken to rein in the hi
dden debts and prevent systemic debt risks, China’s local government debts are under control.