After the boom: how China’s local governments pay the bills

For roughly two decades, China's local governments used the revenue from selling land to property developers to build roads, metro lines and new urban districts, and to cover a large share of their spending. But when the property market slumped, developers began to default and land sales fell sharply, leaving localities with heavy debts and a shrinking source of revenue.In this episode of The Sound of Economics, Yuyun Zhan and Alicia García-Herrero welcome Tianlei Huang to discuss the problem. They explore how China’s land finance model helped fund the country’s economic development and why it could not last. With no single source able to replace the vast revenue from land sales, they argue that deep structural reform will be needed to stabilise local government finances.Relevant research: Huang, T. (2025) 'The fiscal fallout from China’s property bust', East Asia Forum García-Herrero, A. (2025) 'Ten challenges facing China’s economy', Analysis 25/2025, Bruegel Huang, T. (2026) 'China's property bust is spilling across its borders', Blog post, Peterson Institute of International Economics This episode is part of the ZhōngHuá Mundus series of The Sound of Economics. ZhōngHuá Mundus is a newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe. Sign up now to receive it in your mailbox!

In this episode of The Sound of Economics, host Rebecca Christie speaks about financing European innovation with the Jacque Delors Centre’s Marlene Schörner and Louise Tumchewics of the Royal Danish Defence College, specialist in the geoeconomics of defence and electronic warfare. Why do European companies need venture capital and public listings? Does it matter if promising companies go to US markets once they start to scale up? How can private investment finance defence and dual-use technology, and where do governments especially need to work with outside investors to develop new capabilities? What about sustainable finance – are venture capital and equity markets helping a new generation of clean technology, and does defence resilience have a role to play in ESG markets? Related research: Arampatzi, A., Christie, R., Evrard, J., Parisi, L., Rouveyrol, C., van Overbeek, F. (2025) 'A single market for capital: five priorities for the EU', Policy Brief No. 1161, SUERF – The European Money and Finance Forum Merler, S. (2025) 'Can defence investment be sustainable? The European Commission thinks so', First Glance, Bruegel Schörner, M. (2026) 'One fund to scale them all? Filling crucial financing gaps with the Scaleup Europe Fund', Policy Brief, Jacque Delors Centre Schörner, M. (2026) 'How to revive Europe’s stock market listings: Europe should strengthen its public equity markets to finance innovation', Policy Brief, Jacque Delors Centre

In this episode of The Sound of Economics, host Rebecca Christie speaks with Bruegel’s Zsolt Darvas and Debora Revoltella about the European Union’s unprecedented, joint-debt funded Recovery and Resilience Fund, paid for with the NextGenerationEU bond sales program. As the European Commission gets ready to make the program’s final disbursements, did the project work? How much of its promised funding was actually spent? Did countries meet the conditions they agreed were necessary to get EU money? What about Italy? As the EU heads into its next seven-year budget cycle, what lessons can we learn to make the common budget more responsive to national performance? The political battle between austerity and investment will continue, and the RRF offers valuable lessons for what to do next.Related research: Christie, R., G. Claeys and P. Weil (2021) ‘Next Generation EU borrowing: a first assessment’, Policy Contribution 22/2021, Bruegel Darvas, Z., R. Dom, M. Lappe, P. Saint-Amans and A. Steinbach (2025) ‘Bigger, better funded and focused on public goods: how to revamp the European Union budget’, Blueprint, Bruegel Darvas, Z., L. Welslau and J. Zettelmeyer (2023) 'The EU Recovery and Resilience Facility falls short against performance-based funding standards', Analysis 08/2023, Bruegel Darvas, Z and L. Welslau (2023) ‘First lessons from the Recovery and Resilience Facility for the EU economic governance framework’, Analysis, Economic Governance and EMU Scrutiny Unit ‘EIB Investment Report 2025/2026’, Report, European Investment Bank Revoltella, D., T. Bending and A. Kolev (2022) ‘Recovery as a springboard for change’, Policy Brief No. 269, SUERF – The European Money and Finance Forum

In this episode of the Sound of Economics, host Rebecca Christie discusses the economic sway of Brazil, Russia, India and China with Jim O’Neill, who coined the BRIC acronym in 2001, and Bruegel researchers Suman Bery and Alicia García-Herrero. Do these countries still have much in common? How dominant is China? Is it possible for the now BRICS to represent 'the Global South' and which countries should participate? What about geopolitical factors like the Iran conflict and Russia’s ongoing war with Ukraine? Is the world ready to move away from the dollar, and what should be the global role of the renminbi? How is India managing its relationship with the United States and market access with trading partners? Global economic governance is stretched farther than ever, and the world’s significant economies have to figure out some way to relate.Relevant research: García-Herrero, A. (2026) 'The real BRICS summit happened in a side room with Modi and Xi', Opinion, Brussels Times Bery, S (2026), ‘Reconciling domestic goals with global adjustment: Challenges for Indian economic management‘, in Rey, H, B Weder di Mauro and J Zettelmeyer (eds), Paris Report 4: The New Global Imbalances, CEPR Press, Paris & London BRICS+ Thinking

In this episode of The Sound of Economics, Yuyun Zhan and Alicia García-Herrero are joined by Kristy Loke to examine how China governs artificial intelligence and what that means for the global AI race.Relevant research: García-Herrero, A. and T. Storella (2026) 'China’s artificial intelligence goals and strategic choices for Europe', Analysis 24/2026, Bruegel García-Herrero, A. (2026) 'Tough choices ahead as the US pushes a global artificial-intelligence divide', First Glance, Bruegel García-Herrero, A. (2026) 'China Treats AI as Comprehensive Strategy and That Makes a Big Difference', Op-ed, CommonWealth Magazine Loke, K. (2026) 'China’s AI Safety Catch-Up Is Hiding in Plain Sight', Opinion, The Wire China Loke, K. and S. Casper (2026) 'The AI Issue America and China Can Cooperate On Now', Opinion, The Wire China Héigeartaigh, S. and K. Loke (2026) 'China isn’t racing to artificial general intelligence — but U.S. companies are', Opinion, The Wire China Cunningham, R. and K. Loke (2026) 'Why America’s AI Dream Is Failing to Launch', article, The Information Siddiqui, S., K. Loke, S. Clare, M. Lu, A. Richardson, L. Ibrahim, C. McGlynn and J. Ding (2025) 'Promising Topics for US–China Dialogues on AI Safety and Governance', Research paper, Oxford This episode is part of the ZhōngHuá Mundus series of The Sound of Economics. ZhōngHuá Mundus is a newsletter by Bruegel, bringing you monthly analysis of China in the world, as seen from Europe. Sign up now to receive it in your mailbox!

In this episode of The Sound of Economics, host Rebecca Christie discusses financial stability with Bruegel Director Jeromin Zettelmeyer and Olaf Sleijpen, President of De Nederlandsche Bank and a member of the European Central Bank (ECB) Governing Council. What are the risks? How much should we worry about long-term interest rates and soaring budget deficits? Are the biggest threats coming from inside or outside the euro area? What are the ECB’s crisis-fighting tools, and how soon can they be ready? How much of a financial-stability risk is France's ballooning debt? This podcast touches on the European Commission’s banking reform effort, the risks from artificial intelligence and cybersecurity, and the need for resilience and economic growth.Related research:  ‘Priorities and trade-offs for the next round of EU banking reform’, Event, 13 October 2026, Bruegel Frieda, G. (2026) 'What is driving the global rise in long-term interest rates?', Analysis 23/2026, Bruegel Sleijpen, O. (2026) ‘Geopolitics, Trade Uncertainty and Inflation: Chimera or Reality?’, Speech, 17 June, De Nederlandsche Bank Sleijpen, O. (2026) ‘Racing the clock: Europe’s Journey to a Savings and Investment Union’, Speech, 16 June, De Nederlandsche Bank Weder di Mauro, B. and J. Zettelmeyer (2026) 'The new global imbalances: why care, why now and what should be done?', Essay 01/2026, Bruegel

In this special live episode of The Sound of Economics, host Rebecca Christie speaks with Bruegel Director Jeromin Zettelmeyer, Deputy Director Simone Tagliapietra and Non-resident Fellow Elina Ribakova about the 2026 State of the Union speech, delivered 16 September in Strasbourg by European Commission President Ursula von der Leyen. Energy, China, defence, the single market – what were her priorities and can she convince the European Union to take action? What about her proposal to look into “associate” EU membership for Canada? Did Prime Minister Mark Carney’s 17 September speech move things forward?  What does the EU need to do and where will the necessary investment come from? How will big member states like France and Germany shape the debate? As the war in Ukraine continues, how will the EU manage its economic and security commitments? International alliances and political resilience will be more critical than ever in navigating these challenges.Related research: Christie, R., García Bercero, I., Kirkegaard, J.K., Luck, P. (2026) 'What the US-Canada trade war means for Europe', Podcast, Bruegel García-Herrero, A., Ribakova, E., Risinger, L. (2026) 'The China‑Russia asymmetric partnership: Implications for Europe', Policy Article, Kiel Institute for the World Economy  Ribakova, E., Risinger, L. (2026) 'Europe’s Untapped Arsenal', Opinion piece, Foreign Affairs Steinbach, A., Wolff, G.B. & Zettelmeyer, J. (2025) 'The Governance and Funding of European Rearmament', Intereconomics, 60(4), ZBW – Leibniz-Informationszentrum Wirtschaft Tagliapietra, S., Wolff, G. B. (2026) 'Europe’s climate-resilience moment has arrived', First glance, Bruegel Tagliapietra, S. (2025) 'Europe’s fight should start by doing away with hesitation', First glance, Bruegel Zettelmeyer, J. (2026) 'Europe’s challenges: what is new?', Newsletter feature, 31 August, Bruegel Live version of the podcast: The Sound of Economics Live: The State of the European Union 2026

In this episode of The Sound of Economics, host Rebecca Christie sits down with Philip Luck, director of the Center for Strategic and International Studies economics programme, and Bruegel’s Ignacio García Bercero and Jacob Funk Kirkegaard to discuss the trade war between the United States and Canada. As the US announces import bans on various Canadian products, this podcast explores how Washington and Ottawa got to this point. What will happen next, and what will be the spillovers for Europe? The European Union has a strong free trade agreement with Canada and is discussing further integration in areas like digital policy. Will Mark Carney’s scheduled September visit to Strasbourg move the dial? What will be the impact on Canada’s internal economy, not to mention the EU single market? Will the EU and Canada move closer to establishing a coalition in support of rules-based trade? And how will the upcoming US November mid-term elections affect – or not – what happens next in the trade wars?Relevant research: Luck, P. (2026) ‘Elbows Up: Economic Coercion and U.S. Border Labor Markets in the 2025 Trade War’, SRRN Luck, P. (2026) ‘Elbows Up: The Price of Economic Coercion Against Canada’, Analysis, Center for Strategic and International Studies García Bercero, I. (2026) ‘An EU strategy in the wake of the United States Supreme Court tariffs ruling’, First Glance, Bruegel García Bercero, I. (2026) ‘Defining the new strategic direction for European Union trade policy’, First Glance, Bruegel Kirkegaard, J. (2026) ‘Europe Is Stuck With America’, Opinion piece, Foreign Affairs Christie, R. (2026) ‘Stuck in the Middle Again’, Opinion piece, Internationale Politik Quarterly

In this episode of The Sound of Economics, host Rebecca Christie speaks with Bruegel’s Heather Grabbe and Stefanie Walter about Iceland’s referendum on restarting European Union accession talks, Switzerland’s upcoming votes on EU relations and what Europe has to offer for countries inside and outside the club. Why did Icelandic voters reject the proposal to reopen talks? Why does Switzerland have such a complicated relationship with its neighbouring countries, even as it remains part of the Schengen passport-free travel zone? Economic and security concerns are more intertwined than ever with Europe’s relationships with the United Kingdom, Ukraine and North Africa, especially given changes at NATO. Democracy is the cornerstone of Europe’s alliances and also comes with a host of complications – how can the European institutions position Brussels best?Relevant research: Grabbe, H. (2026) ‘Jilted by Iceland – but Wider Europe is forming through new cooperation structures around the EU’, First Glance, Bruegel Grabbe, H. and S. Lehne (2016) 'Can the EU survive populism?', Carnegie Endowment Malet, G. and S. Walter (2024) 'The reverberations of British Brexit politics abroad', European Union Politics, 25(1), 63-85. Malet, G. and S. Walter (2023) 'Have your cake and eat it, too? Switzerland and the feasibility of differentiated integration after Brexit', West European Politics Marini, M. and S. Walter (2024) 'Learning from precedent: how the British Brexit experience shapes nationalist rhetoric outside the UK', Journal of European Public Policy De Vries C., S. Hobolt and S. Walter (2021) 'Politicizing International Cooperation: The Mass Public, Political Entrepreneurs, and Political Opportunity Structures', International Organization Walter, S. (2021) 'Quo vadis, Swiss-European Union relations?', Blog Post, Bruegel

In this episode of The Sound of Economics, host Rebecca Christie speaks about how to fight financial crime with Bruegel’s Nicolas Véron and James Freis, former chief compliance officer at Deutsche Börse and former head of FinCEN, the United States Financial Crimes Enforcement Network. The European Union is setting up its new Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA), which from 2028 will have a combination of supervisory and standard-setting duties. What does it mean to start a new EU agency? What effect will it have for prevention and enforcement in areas like fraud, tax evasion and other abuses? What is the EU’s history in this area, and what past weaknesses is the new agency trying to correct? Given such a big and important mandate, will AMLA have the resources to do its job?Related research: Freis, J. H. and M. Waibel (2024) ‘The United States-Led Development of Financial Sanctions Since 1945’, in C. Zilioli, R. Bismuth and L. Thévenoz (eds) International Sanctions: Monetary and Financial Law Perspectives, Brill  Véron, N. (2025) ‘Updated assessment: Memo to the commissioner responsible for financial services’, First Glance, Bruegel Véron, N. and J. Kirschenbaum (2019) ‘A Major Step Toward Combating Money Laundering in Europe’, Blog Post, Bruegel Véron, N. and J. Kirschenbaum (2018) ‘A better European Union architecture to fight money laundering’, Policy Brief, Bruegel