The income inequality in China is stock. Within cities you also have incredible gaps between the rich and the poor. This is a real problem and this has been growing as China has grown. The government wants to de-risk the economy by putting all this debt on the balance sheets but people are saying that's a great idea for everyone else not for me. We want to continue to borrow and spend so that we can develop our economy.
Hegang, a remote coal town in northern China that faced a mountain of debt, was forced to undergo an unprecedented financial restructuring. And it’s not alone. A local debt problem in some of China’s cities threatens to be a drag on the world’s second-largest economy for years to come.
Bloomberg’s Colum Murphy and James Mayger join this episode from Beijing to talk about what’s happening in Hegang and other cities, and why China’s local debt challenges may be felt well beyond its borders.
Read more: China’s $23 Trillion Local Debt Mess Is About to Get Worse
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