China’s two-decade growth surge prior to COVID was greatly aided by three forces — the liberalization of land development, accelerated urbanization and increased homeownership; entry into the WTO and resulting foreign investment, and industrial policies that created global competitors in next-generation industries. To varying degrees, all of these forces were built on shaky financial foundations.
For land development and urbanization, China’s municipal governments created Local Government Financing Vehicles (LGFV). These entities borrow to build roads, factories, utilities, airports and other infrastructure. They were a way to power demand and investment whenever the national economy threatened to falter.
https://www.marketwatch.com/story/india-vietnam-and-mexico-are-picking-up-the-pieces-of-chinas-broken-economy-92295b19