Tackling local government debt from China Daily
The 10.7 trillion yuan is not a small number, and 80 percent of it comes from bank loans. More than half of these debts have to be paid off between 2011 and 2013. Indeed local governments will have to race against time, as about 25 percent of their loans have to be paid off before the end of this year, and 17 percent next year.
In the first half of 2008, the total amount of local government debt was just 1.7 trillion yuan. At the end of 2010, the figure was up to 10.7 trillion yuan, which was equivalent to 27 percent of China's GDP in 2010, according to the National Audit Office.
So, revenue streams to pay back this debt, anyone?
Finally, we should further expand the range of real estate taxes and fully apply a property tax. The property tax collected by developed countries has already become an important part of public finance at both the state and local levels.All good in sentiment, but that's probably not going to happen by the end of the year to a degree significant enough to pay back $400 billion. Can local governments toss the balls into the air one more time and sell enough land to cover?