Former Chinese Finance Minister Lou Jiwei is calling on the government to begin dealing with a rising debt problem. The sanctions and the trade war with the U.S. have contributed to a reduction of government revenue at the same time that government outlays increase, with an increased portion of government spending going to interest payments.
Lou cited as causes the fallout from aggressive U.S. stimulus policies, the global economic slowdown during the pandemic, an aging Chinese population and mounting domestic local government debt. Lou, who now serves as the chairman of the foreigh affairs committee of the Chinese People’s Political Consultative Conference (CPPCC), broached his concerns already in a December speech at the China Wealth Management 50 Forum. He was concerned then about some of the recent major bailouts by the People’s Bank of China and what he considered insufficient regulation. “Our country lacks a mechanism to analyse risks in multiple fields and resolve them before and during the event,” Lou said. Although Lou had issued similar warnings in his December speech, the publication of his concerns in a Ministry of Finance magazine will draw more attention.
