This is John Batchel, a conversation with Anne Stevenson Yang, author of Wild Ride, about the magic of China that's gone.

This, about the stimulus package just announced by the central government, is it adequate for the municipalities that are suffocating under debt?

Anne explains how they get into this fix and how they're not

getting out of it. Anne Stevenson Yang, author of Wild Ride on the municipalities of China,

struggling, looking to the central government, and nothing. More of this tonight.

That's more or less correct, yes, John.

So local governments were, you know, they tried to get in on the stimulus monies back in 2009 by building all these new facilities based on debt.

But the things that they largely built were things like, you know, water plants and heating plants

and bus lines and metro lines and things like that. And they're leveraged to the teeth

and their debt payments, their interest payments are just beyond what they can support. And

so they keep on begging the central government to relieve that debt. And the central

government's like, you know, no, you're on your own. We don't want the banks to crash, but we don't

want you to, you know, to just like with a with the magic wand, wipe away that debt either.