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Victor Shih, an assistant professor of political science at Northwestern University, reckons debt at these entities reached $1.7 trillion by the end of 2009. Most will need continuing funding, so that figure could more than double by the end of 2011. Because Beijing supports both the banks and the local governments, this lending should arguably be added to the central government’s debt figures. Doing that, Mr. Shih estimates, would make China’s debt-to-GDP ratio, around 20% in 2009, closer to 71%. By 2011 that could rise to 96%.
