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How is China able to Fund its Infrastructure without Foreign Debt?

China is able to fund all its government,infrastructure,military and other public spending by balancing its assets/liabilities.Creating a self liquidating debt and doubling its workforce every 10years.

Ways in which China reduces it's debt burden include;

1) China has a huge public sector.The government controls alot of the key utilities which can be seen as an Unavoidable tax.For example,all the oil companies are state owned.This means that the government makes all the profit and it can be able to finance their staff at the central level.

2) The government owns all the land.Most infrastructure are not directly financed from the central government budget.What happens for example in road construction.The road builders have to form a company which is owned by the local government.The local government sells the land to fund the company.And the company then issues bonds which are to be paid from the revenue of the company.If the company becomes unable to pay the government does a bail out.

3) Revenue is not only recieved from tax but also from land transfers and profits handed over by state owned enterprises.Taxation rates in china are very high. 

4) Chinas economy is growing 300% faster and this reduces debt.Its asset to debt ratio is 3:8:1.This means 98% of its debt is domestic.

5) In China everyone is on board and cooperative with whatever measures the government prescribes.95% of Chinese trust their government and debt is a measure of trust.

Lastly,the government plans it's spending carefully.For example it's military spending has been kept under 1-2% over many years.The spendings are mostly used in investments which help them make more money in the future.Thank you.

Content created and supplied by: Jonemike (via Opera News )

China Chinas


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