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An American in China

Posts Tagged ‘China corruption’

High Speed Rail Loan Used to Cover Bad Loan

Posted by w_thames_the_d on March 18, 2010


State Owned Enterprises in China are black holes of debt, and worrisome to most. Here is an example of what China is doing to hide its debt.

“BEIJING: A township government in Shanghai reportedly borrowed 2 billion yuan ($293 million) in 2008 under the cover of a national high-speed railway project to repay debt, highlighting the risk of spiraling local government debts.

The Guangzhou-based 21st Century Business Herald reported the news on Wednesday, citing an audit document that was allegedly filed by the National Audit Office (NAO) in 2009 and recently obtained by the paper.

The case reveals the huge pressure placed on China’s regional governments to finance their spending as China boosts its economy with a 4-trillion-yuan stimulus plan.

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