WORLD NEWS: "Concerns About Cost of China's Stimulus Grow," by Andrew Batson, Wall Street Journal, 10 June 2009.

The hidden cost of China's stimulus effort: matching funds from local governments raised by debt.

Key bit:

The spending spree has helped steady China's economy while other major nations remained mired in the global downturn. It is one of the largest stimulus programs adopted by any government in the world--yet China plans to hold its budget deficit to just 3% of gross domestic product this year. That's about where the U.S. hopes its deficit can end up in a few years after it scales back its stimulus spending.

In fact, China's formal budget is paying for only about a quarter of the two-year, four trillion yuan ($585 billion) investment program. Stimulus projects typically get fast approval and a partial financial contribution from the central government, with local authorities left to come up with the majority of the funds. But they don't have much money, as China's tax system channels most revenue to Beijing.

China's debt structure beats most advanced countries still, but it's not quite the gold standard that it seemed.

In general, a lot of Chinese debt is off the books: environmental, demographic, etc.