Current Publications
Debt Risk after the Reform: China’s Land-Backed Municipal Bonds
- Author(s)
- Timna Michlmayr
- Abstract
Land-backed borrowing emerged as one of China’s major economic risks after the accumulation of local government debts and the implementation of the RMB 4-trillion fiscal stimulus package in 2008. Despite the introduction of far-reaching debt reform and the reorganization of local borrowing mechanisms in 2015, the era of land-backed debt increases and the leveraging of public land resources is not yet over. As exemplified by the recent developments in China’s municipal bond market, new mechanisms for land-backed borrowing were introduced on a trial basis in 2017 under the novel debt management regime. By critically evaluating the introduction of land-backed municipal bonds, this research paper sheds light on recent developments in local government borrowing in China that have not been discussed in detail so far. My evaluation draws on an in-depth analysis of central and local policy documents
issued after 2008, a data set on municipal bonds issued after 2017, insights from preliminary field research trips, and secondary literature on the topic. I argue that the introduction of landbacked bonds reflects an attempt to strengthen the top-down control over local borrowing, with the leveraging of land necessarily being upheld due to institutional constraints and path
dependency.- Organisation(s)
- Department of East Asian Studies
- Journal
- Asien: the German journal on contemporary Asia
- ISSN
- 0721-5231
- Publication date
- 01-2021
- Austrian Fields of Science 2012
- 506014 Comparative politics, 502027 Political economy, 602045 Sinology
- Keywords
- Portal url
- https://ucris.univie.ac.at/portal/en/publications/debt-risk-after-the-reform-chinas-landbacked-municipal-bonds(c4fc72c8-f091-423c-910f-7e4db74ff805).html