Ken Rogoff made this comment in his FT article today "Spotting the tell-tale signs of bubbles approaching". He further commented that
"In China today, the real problem is that one seems to have very good data on how debt is distributed, but much less understanding of the web of implicit and explicit guarantees underlying it. But this is hardly a problem unique to China. Even as published official government debt soars, huge off-balance sheet guarantees and borrowings remain hidden for political expedience around the world."
Rogoff’s comments remind me of recent report on the explosive debt increase of China’s local government. Gains from selling land make the local governments over-optimistic about their future incomes and increase their financial leverages.