On Monday, the Chinese government took an important step toward revealing the extent of borrowing by local governments. But full disclosure is still a long way off.

　　周一，中国政府朝着披露地方政府债务规模迈出了重要的一步。不过，远远没有达到全面披露的程度。

　　The National Audit Office released a report showing local government financing vehicle, or LGFV, debt at 4.97 trillion yuan ($768 billion), a figure that is much lower than previous government estimates and thus should be discounted. However, the NAO report also disclosed for the first time that non-LGFV local governmental debt totaled 5.7 trillion yuan at the end of 2010.

　　中国国家审计署公布的一份报告表明，地方政府融资平台负债人民币4.97万亿元（合7,680亿美元），这个数字大大低于此前政府的估计，因此不能全信。不过，国家审计署的报告还首次披露说，截至2010年底，不包括地方政府融资平台在内的地方政府债务总额为人民币5.7万亿元。

　　Combining the 5.7 trillion yuan in non-LGFV debt with previous China Banking Regulatory Commission and People's Bank of China estimates on LGFV loans outstanding, we arrive at total local governmental debt ranging between 15.4 trillion yuan and 20.1 trillion yuan, or 40% to 50% of China's 2010 GDP.

　　将上述5.7万亿元非地方政府融资平台债务与此前中国银监会和中国央行估计的地方政府融资平台未偿贷款综合在起来，我们得出的结论是地方政府债务为15.4万亿元至20.1万亿元，相当于2010年中国国内生产总值(GDP)的40%-50%。

　　Important pieces of the local debt puzzle remain hidden, including local state-owned enterprise debt and the non-loan liabilities of LGFVs. Nevertheless, the recent government reports should be a wake-up call to Beijing that it urgently needs to address this issue.

　　地方政府债务“拼图”的重要部分依然隐藏着，包括地方国有企业债务和地方政府融资平台的非贷款债务。不过，政府最近的报告应该给北京敲响了警钟，说明这个问题的解决已刻不容缓。

　　That hasn't happened yet. Even as government audits begin to reveal the true scale of the problem, local governments across China continue to finance new construction projects. Because the central government has not made clear whether anyone would bear any serious costs for allowing the debt to grow, local governments have every incentive to continue their leveraging.

　　然而，北京尚未意识到问题的紧迫性。就在政府审计开始暴露出问题的真正规模之际，中国各地的地方政府却在继续为新的建设项目融资。由于中央政府一直没有明确规定是否该有人对任由债务增长付出重大代价，地方政府毫无后顾之忧地继续借贷。

　　In the absence of any obvious costs, local officials race against each other to borrow even more to finance grand projects before they rotate to new positions next year, while banks, which depend on new loans to illiquid borrowers to prevent old loans from becoming nonperforming, continue to pour credit into LGFV borrowers.

　　ZUMAPRESS.com中国青海的工人们正在铺设铁轨。在无需付出任何明显代价的情况下，地方政府官员在下一年调任其他职务之前，争相更多地争取贷款来为大型项目提供资金，而银行则是依靠向资金紧张的借款人发放新的贷款来防止原有贷款变成不良贷款，继续向借款的地方政府融资平台大量放贷。

　　China has been here before. In the 1980s and 1990s, determined technocrats in the central government, including Chen Yun, Yao Yilin and Zhu Rongji, acted decisively to impose steep costs on both local governments and the banks. In a maneuver called “cutting with one stroke,” central government officials ordered banks to stop credit expansion to all but a handful of investment projects. To prevent local governments from borrowing from informal banks, thousands of such banks were shut down.

　　中国过去也曾经历过这样的问题。上世纪80年代和90年代，中央政府中坚决的技术官员（包括陈云、姚依林和朱镕基）果决地令地方政府和银行双双付出了高额的代价。按照所谓的“一刀切”的做法，中央政府官员下令银行停止向大部分投资项目放贷，只有为数不多的项目例外。为防止地方政府从非正式的银行借款，数千家非正式银行被关闭。

　　Local officials saw promising projects turned into half-built skeletons, while banks saw spikes in nonperforming loans. As painful as “cutting with one stroke” was, it credibly showed local officials that they could no longer launch new projects without considering mounting debt. Banks also experienced the costly consequences of lending recklessly to local authorities.

　　地方政府官员眼看着充满希望的项目变成了烂尾楼，而银行则看着不良贷款大幅增加。尽管“一刀切”的后果惨重，却使地方政府官员认识到，不能在不考虑激增债务的情况下再推出新的项目。银行也尝到了一味地向地方政府放贷所带来的苦果。

　　In essence, because financial institutions in a quasi-planned economy favored easy credit to state-owned borrowers, central technocrats periodically engineered credit crunches to remind everyone of the risks of too much leveraging in the system. Although somewhat awkward, it was very effective in controlling the size of leverage.

　　实际上，由于“准计划经济”中的金融机构喜欢向国有企业随便放贷，中央政府中的技术官员定期策划信贷紧缩，以提醒人们经济中贷款过多的风险。尽管这种方法有些笨拙，但对控制贷款规模却非常有效。

　　Since China recognized a large pool of nonperforming loans in its banks in the late 1990s, however, we have not seen a sustained credit crunch engineered by the central government. In 2008, a credit crunch was in place until the global economic crisis led Beijing to release a deluge of credit into the economy. Local authorities rejoiced as banks lent out trillions in the space of a few months.

　　但是，自从中国在20世纪90年代晚期承认银行系统内存在大量不良贷款以来，还没有出现过一场由中央政府主导形成的持续信贷紧缩。2008年有过一场信贷紧缩，但全球经济危机促使北京把洪水般的信贷注入经济体系。银行在数月之内贷出数万亿的资金，地方政府欢欣鼓舞。

　　The current debt level may be sustainable if the overall amount of debt stops growing. Yet, the latest estimates suggest that LGFV interest payments are at least 1 trillion yuan a year, and realistically more than 2 trillion yuan. Because most local governments run perennial deficits, they can only meet this payment by borrowing more from banks or investors or by imposing greater costs on households via land confiscation and fees.

　　如果债务总量不再扩大，当前的债务水平或许是可持续的。但从最新估计来看，地方政府融资平台一年的付息成本至少有1万亿元，实际上应该是在2万亿元以上。由于地方政府大多常年维持赤字，它们只有继续从银行或投资者手中借款，或通过征地、收费而把更大财政负担转嫁到家庭身上，这样才能偿还这些利息。

　　Despite this mounting problem as well as inflationary pressures, the central government has not signaled to local authorities that they must stop borrowing. New CBRC regulations only force local governments to work with banks to restructure their debt. The fact that the NAO uncovered nearly 5 trillion yuan in LGFV loans, which the local government directly or indirectly underwrote, suggests that local governments in many cases have not complied with CBRC regulations forbidding direct governmental guarantees of LGFV loans. Few if any local officials have been removed as a consequence of violating these rules.

　　虽然存在日益严重的偿债问题以及通胀压力，中央政府并未向地方政府发出必须停止借款的信号。银监会新规只是强制地方政府会同银行重组债务。审计署发现平台贷款接近5万亿元，而这些贷款又是地方政府直接或间接担保的，这说明地方政府在很多情况下并没有遵守银监会禁止政府直接担保平台贷款的规定。因为违反这些规定而被免职的官员即使有，数量也是非常少的。

　　Even with some central bank efforts to restrict credit growth in recent months, central bankers are clearly under instruction not to cause any kind of credit crunch. When interbank rates rose too high in recent days, the central bank stopped issuing notes that would withdraw cash, so as to pump liquidity into the system. Banking regulators, which had issued a decree banning trust products based on loans to real estate developers, have not enforced this decree, leading to the rapid rise of products tied to real estate investment in recent months.

　　虽然央行在近几个月采取了一些限制信贷增长的措施，但它明显是接到了不要引起任何信贷紧缩的指示。近几天银行间利率过高时，央行停止发行回笼现金的票据，以便向银行系统注入流动性。银行业监管方曾经发布禁令，不准以借给房地产开发商的贷款为基础推出信托产品，但这条禁令并未得到执行，从而导致近几个月与房地产投资挂钩的信托产品迅猛增加。

　　At one point recently, credible rumors started circulating that Beijing was going to engineer a bailout of 2-3 trillion yuan for this local-government debt. This would have forced banks and the central government to share the costs of bailing out illiquid LGFVs. However, it turns out that Beijing did not have the resolve to carry out this limited plan. Worse, senior leaders have stated that money supply expansion has returned to its normal fast rate, signaling to banks and local governments alike that a new wave of credit expansion is at hand.

　　最近一段时间有可靠传言说，北京将对地方政府平台债务实施一轮2万亿到3万亿元的救助。如果真是这样，银行和中央政府就要分担困难融资平台的救助成本。但事实证明，北京没有实施这种有限计划的决心。更为严重的是，高层领导人已经声明说，货币供应的增长已经回归正常的高水平，这等于是跟银行和地方政府说，新一轮信贷扩张即将开始。

　　Without any credible constraints against local borrowing, the local debt bubble will continue to grow, affecting an ever larger share of the economy. Meanwhile, debtors' ability to service debt continues to deteriorate because the same weak cash flow must cover the interest on a growing pile of debt. Although a credit crunch would be highly inconvenient before the 18th Party Congress next year, senior leaders in Beijing must find the resolve, as their predecessors had, to send a clear and costly signals to local officials that enough is enough.

　　如果不能可靠地约束地方的借款行为，那么地方债务泡沫就会继续膨胀，影响到经济体中越来越大的部分。与此同时，债务人的偿债能力继续恶化，因为现金流仍像以前一样微弱，而需要支付利息的债务却越来越多。虽然在明年第18届党代会前夕发生信贷紧缩会非常麻烦，但北京的高层领导人必须像他们的前任一样下定决心，向地方官员发出清晰的、有代价的信号：够了。