ML-Implode News - As China Reduces Local Spending, Cities Woo Private Investors

``In the past, city officials would have turned to low-cost loans from state-owned banks, as the national government encouraged local spending to spur economic growth. But the Chinese leadership, worried about the country's ballooning debt problem, is backing away from that strategy. Like hundreds of cities across China, Weifang is now wooing deep-pocketed private investors, both local and overseas, to help pay for public infrastructure and services.
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Although the country escaped the worst of the global financial crisis six years ago, it did so on the back of a borrowing binge by local governments, which spent heavily on new but often unprofitable infrastructure projects. Now, many local governments are mired in debt.
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Since 2007, China's overall local government debt has risen at an annual rate of 27 percent. It now totals almost $3 trillion, according to estimates from the consulting firm McKinsey & Company.

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As China Reduces Local Spending, Cities Woo Private Investors