China's mounting economic woes prompted US President Joe Biden toAnd now, a lesser-known, but no less ominous, economic threat is rearing its head: China's colossal hidden-debt problem.
The notion of "hidden debt" was defined by China's State Council in 2018 as any borrowing that does not form a part of on-budget government spending – in essence, off-the-books financing.
As risks tied to the sector mount, banks are unwilling to lend more, investors are turning their backs on bonds, and viable projects are harder to come by, according to several anonymous employeesAs a result, the local governments have been struggling to generate enough income or raise funding to meet the costs of servicing their debt.
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