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The Financing of Local Government in China: Stimulus Loan Wanes and Shadow Banking Waxes / Zhuo Chen, Zhiguo He, Chun Liu.
- Format:
- Book
- Author/Creator:
- Chen, Zhuo.
- Series:
- Working Paper Series (National Bureau of Economic Research) no. w23598.
- NBER working paper series no. w23598
- Language:
- English
- Physical Description:
- 1 online resource: illustrations (black and white);
- Other Title:
- Financing of Local Government in China
- Place of Publication:
- Cambridge, Mass. National Bureau of Economic Research 2017.
- Summary:
- China's four-trillion-yuan stimulus package fueled by bank loans in 2009 has led to the rapid growth of shadow banking activities after 2012. Local governments financed the stimulus through bank loans in 2009, and resorted to non-bank debt financing after 2012 given the rollover pressure from bank debt coming due, a manifestation of the stimulus-loan-hangover effect. Cross-sectionally, provinces with greater bank loan growth in 2009 experienced more Municipal Corporate Bonds issuance during 2012-2015, together with more shadow banking activities including Entrusted loans and Wealth Management Products. We highlight the market forces behind the regulation changes on local government debt post 2012.
- Notes:
- Print version record
- July 2017.
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