Cover Story: China’s Effort to Move Mountain of ‘Hidden Debt’ Faces Uphill Climb

As China's economic growth gets back on track after three years of pandemic, efforts to tackle the mountain of so-called “hidden debt” accumulated by local governments have re-emerged as a priority on the agendas of top policymakers.

Fresh concerns have mounted that weakening income growth and rising spending over the past few years may force local authorities to resort to new off-the-book borrowing, while limiting their ability to pay down the debt. These liabilities are estimated by some to be almost $10 trillion, roughly double the GDP of Japan, the world’s third-largest economy.