Local governments have been instrumental in driving China’s remarkable economic growth over the last 30 years, in particular by providing massive public investments in critical physical and social infrastructure. Yet, amid a slowing economy and an ailing property market, debt-laden municipalities now pose a potential risk to China’s economic growth and financial stability. Market concerns have resurfaced over local governments' off-balance-sheet debt, which amount to 55-60 trillion yuan (U.S. $7.5-8.2 trillion) by our estimates. These off-balance-sheet entities, known as local government financing vehicles (LGFVs), ... (full story)