Shandong to Allow County-level Governments Go Bankrupt over Debt

(CRI) The provincial government of Shandong has issued a new decree, saying all county-level governments will need to fend for themselves when it comes to the risk of defaulting on their debt.

The decree says the provincial government will not bail out counties who default.

The decree is the first of its kind across the country.

It comes at a time when many local governments continue to pile on huge debt after years of heavy borrowing.

The Shandong government does say it will help finance projects that are already under construction.

At the same time, fund raising in Shandong is being limited to issuing government bonds.

Shandong is the third largest regional economy in China, after only the provinces of Guangdong and Jiangsu.

The province is expected to surpass South Korea in total economic output in the coming year.

Source: CRI