18 April 2019

Huge infrastructure funding gap seen by 2020, report says

An independent think-tank has estimated that infrastructure financing gap in China could reach about 20 trillion yuan (US$3.28 trillion) in the year 2020 amid the government’s urbanization drive, the Economic Information Daily reported Friday. The calculation is based on an assumption that the government will be able to keep its debt at below 60 percent of gross domestic product (GDP) at that time, according to a report released by the Urban China Initiative (UCI), a joint initiative of Columbia University, Tsinghua University’s School of Public Policy and Management, and McKinsey & Co., the paper said. Currently, local governments shoulder much of the responsibility for financing the infrastructure projects that emerge during urbanization. Experts advised that China should develop non-debt financing routes and expand urban construction financing channels to avoid systemic risks, the report said.

– Contact HKEJ [email protected]


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