ABSTRACT
As this chapter was being written, during the latter part of 2011, global financial markets were in turmoil following a sovereign downgrade in the United States and there were worries that the debt crisis in Europe was spreading from the periphery to the core. Against this background, government debt in the People’s Republic of China (PRC), which official numbers suggest is well below 20% of gross domestic product (GDP), would hardly seem to merit a second glance. Yet concern about sovereign debt in the PRC has been growing, with the possibility that official numbers significantly understate the government’s true indebtedness.
