Local authorities turned to heavy borrowing after the 2008 financial crisis, forcing Beijing to take action
The autonomous region was among 12 province-level jurisdictions flagged by Beijing for risky debt levels, with its exit revealed in a local budget review discussed internally in late July but only released to the public earlier this week.
“[We must] consolidate the progress made in exiting the list of key high-debt regions and guide local authorities to continue debt resolution efforts based on local conditions,” according to a statement released by the finance and economic committee of the northern region’s People’s Congress.
Inner Mongolia, the country’s top coal miner and a major supplier of renewable energy and dairy products, had previously been forced to shelve a subway project in Baotou – the region’s second-largest city – because of financial risks.
The model has become increasingly unsustainable, particularly as fiscal revenue from land sales has declined.
