Why China's local government debt is so scary

The economy of China is either the twenty-first century`s greatest economic story or a treadmill to Hell. It depends on whom you ask.

There are bright and admirable people on both sides. Jim Chanos of Kynikos Associates and Hugh Hendry of Eclectica have been warning that China`s economy is much more fragile than it appears-and attempting to profit from any collapse by shorting various angles of the China story. Jim Rogers says they are "dead wrong."

From my perspective, this is part of the problem. The Chinese economy is so dominated by the state-and the state so dominated by a ruling clique dedicated to preserving both power and reluctant to embrace informational transparency-that it remains extremely murky.

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