![]() ![]() Those who have bought these apartments typically own other houses that they live in.Īs China’s growth has slowed, the infrastructure created in many such cities have become serious liabilities, with little prospect of full occupancy any time soon. ![]() But according to the International Monetary Fund (IMF), when loans from these UDICs are factored in, the government debt rises to about 70%.ĭue to such excessive loan-raising, there is a lot of speculative housing and infrastructure building, with cities full of empty apartment buildings and shopping malls. Government revenue-raising power is used as guarantee to repay the loans.Īt 38% of GDP, less than half the average in developed economies, government debt in China may seem under control. These vehicles borrow in an unlimited fashion from State-run banks. China’s UDICs are similar to India’s special purpose vehicles (SPVs) that are set up for the purpose of financing the metro rail, smart cities, etc.Īccording to latest estimates, China has 11,566 UDICs, implying one for every urban government. Given that local governments in China are responsible for nearly 85% of public expenditures, but generate only 50% of revenues, one of the major drivers financing the country’s urban growth has been urban development and investment companies (UDICs). She was senior advisor to GDN’s global project on urbanization in Nepal and Ecuador, and is member of expert committees of the government of Karnataka on urban development. She was India country expert for ADB’s project on green urbanization in Asia, and is involved in ADB’s project on the urbanization-poverty-inequality triangle. She is the recipient of several international awards and has visited UNU-WIDER in Helsinki several times. She has written several books on urban issues, journal articles and chapters in books. Prior to this, she was Fellow at the National Institute of Public Finance and Policy, New Delhi, Associate and Assistant Professor at the Indian Institute of Management, Lucknow, and Research Economist, National Association of Home Builders, Washington, DC. Kala S Sridhar is Professor and head, Centre for Research in Urban Affairs at ISEC, and was earlier Ford Public Affairs Fellow and Head, Public Policy Research at Public Affai rs Centre. ![]()
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