Japan’s first female prime minister, Sanae Takaichi, began her tenure with strong approval ratings. Yet rising tensions with China over her recent comments about Taiwan and doubts over her government's newly unveiled stimulus package now loom large. Kiyoteru Tsutsui, the director of APARC and our Japan Program, assesses Takaichi's first month in office and what to watch for next. Get his full analysis in our APARC Briefing:

APARC Briefing is a new format we are experimenting with to provide concise, evidence-based analysis of fast-moving developments in Asian affairs. To stay up to date on future installments in this new video series, subscribe to APARC's YouTube channel.

Stanford student JB (Jong Beom) Lim and recent alumni Darren Hall, Yoojung Lee, E Ju Ro, and Maleah Webster all had the opportunity to work as research assistants with the Stanford Next Asia Policy Lab (SNAPL). They also have another thing in common: all are heading next fall to prestigious programs where they will embark on their doctoral training in law, political studies, and sociology.

Housed at the Walter H. Shorenstein Asia-Pacific Research Center (APARC) and led by sociologist Gi-Wook Shin, the William J. Perry Professor of Contemporary Korea and a senior fellow at the Freeman Spogli Institute for International Studies, SNAPL addresses emergent social, cultural, economic, and political challenges facing Asia-Pacific countries and guides effective U.S. Asia policies through interdisciplinary, comparative, and data-driven research. A core mission of the lab, which Shin founded in summer 2023, is to support and mentor the next generation of Asia scholars through its fellowship opportunities and research assistantships.

“The success of our former research assistants demonstrates exactly the kind of impact I envisioned when I launched SNAPL,” says Shin, who also serves as the director of APARC and the center’s Korea Program and Taiwan Program. “Our lab is a space where young researchers engage deeply with urgent issues in Asian affairs and U.S.-Asia relations while building the skills and networks to carry them forward as they pursue advanced academic training. I am tremendously proud of what our bright young scholars have achieved – they will be leaders in Asian studies.”

​​In its short history, SNAPL has already seen previous team members advance to graduate studies at top institutions. These include current PhD students Kelsi Caywood (sociology, University of Michigan); Sean Chen (economics, Princeton University); Haley Gordon (sociology, Stanford University); and Vineet Gupta (sociology, Northwestern University).

We spoke with Darren, Yoojung, JB, E Ju, and Maleah about their experience at SNAPL, next steps in their academic journeys, and advice for new students. The responses below were slightly edited for clarity and style. 

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Darren Hall 

Darren Hall graduated from Stanford in 2023 with a bachelor’s degree in East Asian studies. Darren received multiple department awards for his undergraduate work, including the Kung-Yi Kao Prize for Outstanding Progress in the Study of the Korean Language and the James J.Y. Liu Prize for Outstanding Writing in an East Asian Languages and Cultures Course.

After graduation, he was a research assistant for the “Nationalism and Racism in Asia” track at SNAPL. In that role, he conducted a literature review, consulted with the project team to improve research methods, and helped conceptualize and develop the foundation for the project’s eventual publication.

“SNAPL not only provided me with mentorship but also an opportunity to investigate the interplay of nationalism and racism throughout Asia,” he says.

After his time at SNAPL, Darren worked as a corporate legal assistant at BraunHagey & Borden LLP, where he supported a team of attorneys through multi-million dollar transactions.

In fall 2025, Darren will begin his first year at Yale Law School. He plans to explore international conflict resolution and continue to develop his advocacy for underrepresented communities. Darren intends to become an attorney who prioritizes compassion and justice.

Yoojung Lee

Yoojung Lee graduated from Stanford in 2023 with a master’s degree in East Asian studies. In the coming fall quarter, she will embark on her new path as a doctoral student in sociology at Harvard University. Her research centers on a comparative investigation of political polarization through the intersecting lenses of gender, race, and ethnicity. 

Her time at SNAPL, while working for the “Nationalism and Racism in Asia” research track, and the generosity and depth of insight of the lab’s community of scholars have left a lasting imprint on Yoojung and broadened her intellectual framework. “The diversity of experiences and perspectives within the lab has profoundly reshaped how I engage with the world, not only in terms of how I think, but also in what I prioritize, whose voices I amplify, and how I approach the questions that guide my research.”

Yoojung also credits the SNAPL community for advancing her personal development. “The collaborative spirit of the lab and the dedicated mentorship I’ve received have influenced how I navigate challenges, engage with complexity, and embrace uncertainty. Within this space, I’ve learned to view setbacks as opportunities for growth and stay grounded in the deeper purpose behind my work. It is also here that the idea of pursuing a PhD, once abstract and distant, transformed into a tangible, deeply personal goal.”

The clarity, conviction, and sense of direction Yoojung feels about her academic path are inseparable from the lessons, experiences, and support she has found at SNAPL. “For all of this, I am eternally grateful: not only for the intellectual enrichment, but for the sense of belonging, purpose, and hope that SNAPL has given me. These are the gifts I will carry with me into my PhD and beyond.”

JB Lim

JB (Jong Beom) Lim will graduate this spring from Stanford with a master's degree in computer science and bachelor's degrees in mathematical and computational science and international relations. He has received interdisciplinary honors from the Center for International Security and Cooperation, with his undergraduate thesis recognized by the Center for East Asian Studies and the Hoover Institution.

In fall 2025, JB will begin his doctorate as a Raymond Vernon Fellow at Harvard University's Department of Government. He will examine how economic interdependence shapes national security strategies, focusing on how domestic interest groups influence foreign policy decisions regarding technology and trade. As part of his research, JB also hopes to develop quantitative methods in machine learning and causal inference, leveraging large-scale granular data.

At SNAPL, JB assisted with the “U.S.-Asia Relations” research track. “Working at SNAPL introduced me to cutting-edge political science research and allowed me to build novel datasets on congressional speeches and scholarly networks,” he says. “This experience sharpened my methodological skills and taught me to approach complex questions creatively and with rigor.”

JB’s advice to current students? “Embrace interdisciplinary research – it opens unexpected doors and broadens your understanding of global challenges.”

E Ju Ro

At Stanford, E Ju Ro earned her master's and bachelor's degrees in sociology, a minor in philosophy, and honors in Ethics in Society. Beginning in the coming fall quarter, she will attend New York University Law School. She is particularly interested in international human rights and critical legal studies. 

As a research assistant with SNAPL, E Ju had the opportunity to work on the “Nationalism and Racism in Asia” track, specifically on a study analyzing the discourse of state party reports submitted to the United Nations Committee on the Elimination of Racial Discrimination (CERD) by 16 Northeast, Southeast, and South Asian countries.

“It was fascinating to examine the reports various Asian governments sent CERD, as I could see how their specific cultural and historical contexts shaped the ways they dealt with (or did not deal with) racial issues,” says E Ju. “While pursuing sociology studies at Stanford, I’d felt that most of my research experience and classes had focused on the United States, so this was a refreshing chance to look at the construction of race across time and borders."

Maleah Webster

At Stanford, Maleah Webster received a bachelor's degree in international relations with honors and distinction. She concentrated on East and South Asia and social development and human well-being.

This coming fall, Maleah will begin a doctorate in sociology at Stanford. Her research investigates how migrant communities navigate identity, belonging, and access to resources in contexts where ethnic homogeneity is closely tied to national identity. She focuses on institutions as key sites where integration is negotiated and contested, whether through policy, discourse, or lived experience. Currently, she conducts fieldwork in South Korea, using interviews, surveys, and policy analysis to decipher how multiculturalism is defined and experienced in real-world settings.

Maleah describes her experience working as a research assistant with SNAPL as a highly valuable part of her time at Stanford. She, too, worked on the lab’s “Nationalism and Racism in Asia” research track. “It gave me a real sense of how cross-national research can inform policy in nuanced and meaningful ways. Being part of SNAPL helped me see how institutions don’t just implement policy – they help define who counts, who belongs, and who gets overlooked.”

Her tip for new students is to “take the initiative to get involved with research early, especially in interdisciplinary spaces like SNAPL. You never know what opportunities (or career trajectories) it might open up.”

Mounting hidden local government debt is one of China’s pressing challenges. Held by local government financing vehicles (LGFVs) and estimated between US$8-10 trillion, this off-the-books debt originates from a long-running tug-of-war over tax revenue between China’s central government and the localities. In the years before COVID-19, LGFVs controlled their debt by drawing on steady non-tax revenues. In summer 2020, however, approximately six months after the pandemic broke out in Wuhan, the hidden debt held by LGFVs began rising dramatically. Today, many of them are nearing default, and local governments are increasingly going broke.

​​Why did hidden LGFV debt rise so much during COVID?

A recent study, published in The China Journal, sheds light on this question. The study’s co-authors – including Jean Oi, the William Haas Professor of Chinese Politics, a senior fellow at the Freeman Spogli Institute for International Studies, and director of the China Program at APARC – use quantitative data to show how China’s central government’s regulatory crackdowns on income tied to the real estate sector during the pandemic disrupted the revenue sources LGFVs and their local governments relied on to service their debts. These policy changes “interacted with the zero-COVID policy to create a perfect storm, pushing hidden local government debt to new highs,” they write. 

Their study draws on a wide array of quantitative data, tracking information on factors ranging from COVID shocks (including confirmed cases and deaths) to, among others, government medical responses, special treasury bonds and their allocation, local debt, land purchases, and business activities. Using these sources, the co-authors built a province-level dataset covering all 31 of China’s provincial units from 2018 to 2022, allowing comparative analyses before and after China’s COVID shocks. They organized the data into three categories: (1) the impact of COVID on small and medium enterprises; (2) government fiscal responses and COVID expenditures during the pandemic; and (3) local government finances and debts.

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The Pre-COVID Era: The Grand Bargain That Failed

China’s local debt problem traces back to the 1994 fiscal reforms, which recentralized tax revenues in Beijing and left local governments with chronic budget shortfalls. To bridge the gap, the central government struck a “grand bargain”: while claiming a larger share of tax income, localities could generate new non-tax revenues through special-purpose vehicles, namely, local government financing vehicles. These LGFVs were set up as state-owned enterprises to incur and hold debt off-the-books, yet not illegally, on behalf of local governments.

The workaround fueled rapid development for years but laid the groundwork for today’s mounting hidden debt crisis.

“The success of LGFVs hinged largely on revenue generated through land finance,” explain Oi and her co-authors. “Local governments provided LGFVs with cheap land as collateral for bank loans and bonds. Further revenue was generated from preparing and selling land to real estate developers.”

Thus, LGFVs powered over a decade of rapid growth in China, driving infrastructure booms and urbanization that made the real estate sector a cornerstone of the economy. The model appeared mutually beneficial: the central government gained more tax revenue as the economy grew, while local governments used land sales and debt to fund development. But this growth depended on a continuous flow of non-tax income, making the system increasingly fragile.

After the 2008 global financial crisis, Beijing launched a sustained push to rein in local government hidden debt, focusing heavily on LGFVs. By 2017, officials labeled the risk a “gray rhino.” Yet this drive for fiscal discipline ground to a halt with the onset of COVID.

A Perfect Storm of Policy and Pandemic

The pandemic’s impact was swift and severe. Small and medium-sized businesses, especially in the hardest-hit regions like Hubei Province, saw their incomes collapse by up to 90%. In response, Beijing provided a massive fiscal support package to localities, including one trillion yuan in special COVID bonds to offset the costs from the initial onslaught of the pandemic. Crucial for LGFVs, these bonds cushioned the impact of the pandemic on land sales.

By summer 2020, however, as China was still locked away from the rest of the world and COVID was under control, Beijing resumed its policy agenda to enforce fiscal discipline and curb local government debt. The central government’s most consequential measure was the “three red lines” policy, which dealt a major blow to China’s real estate sector by sharply restricting developers’ ability to borrow once debt thresholds were crossed. The policy, expanded from 12 pilot firms in 2020 to cover the entire sector by 2021, disrupted the “borrow-to-grow” model and triggered a liquidity crisis. Evergrande, China’s second-biggest property developer, was among the first groups affected.

As borrowing dried up, firms struggled to repay debt, halted construction, and stopped buying land, slashing local government revenues. Land sales plummeted across provinces, with national revenue growth from land transfers plunging into negative territory by 2022. The crisis deepened when unfinished housing projects led to mortgage boycotts by frustrated home buyers, prompting more state intervention.

For local governments, the shift came at a steep cost. They were ordered to step in, using LGFVs to purchase land and inject cash into public budgets. As a result, even wealthier provinces like Shanghai and Guangdong saw sharp increases in LGFV debt.

“The call for LGFVs to buy land to create revenue for local governments made matters worse, turning land from a key source of revenue into a source of new debt and forcing LGFVs further to increase borrowing, all of which caused soaring increases in LGFV debt, without any alternative revenue source to service or pay that debt,” explain Oi and her co-authors.

A Fiscal Reform Imperative

The study shows how China’s shifts in central government policies during the pandemic – especially the three red lines and the directive for LGFVs to buy up unwanted land — exacerbated long-standing vulnerabilities in local public finance. What had been a delicate balancing act quickly became unsustainable.

“At the root of China’s continuing crisis of LGFVs' debt is China’s flawed fiscal system,” the co-authors emphasize. Before the pandemic, the system masked deficits by relying on LGFVs to generate off-the-books revenues, primarily through land sales fueled by a booming real estate market. This arrangement allowed Beijing to capture the bulk of tax revenue while localities chased growth. But when COVID struck and the property sector collapsed, the facade crumbled.

The fallout exposed how deeply local governments had come to depend on land finance – an unstable, non-institutionalized revenue stream. With the real estate sector once accounting for over 20 percent of GDP, its collapse left localities and their financing vehicles adrift. “In the context of a crisis such as COVID, the weakness of the fiscal system and LGFVs was exposed as policy instability added to the volatility of the economic situation,” Oi and her co-authors note.

The local government debt problem might not trigger a financial crisis in China, “but LGFVs and their local governments remain in dire straits,” they write. More worrying, the economy has not rebounded in the post-COVID years as hoped, and “as long as the real estate sector remains depressed, land finance will not be able to make local government budgets whole as it once did. The grand bargain can’t work.”

Rather than assume the debt, Beijing is extending lifelines: urging banks to offer LGFVs 25-year loans with temporary interest relief, approving debt swaps into longer maturity municipal bonds, and allowing new issuances of special-purpose bonds. But these are stopgaps, not solutions.

Hidden debt will keep resurfacing unless China overhauls the fiscal system born out of the 1994 reforms, Oi and her co-authors conclude. Institutionalized, dependable, alternative revenue streams for local governments are needed, or the crisis will persist. “It may be time for Chinese leadership to stop kicking the can down the road and undertake institutional reforms of the fiscal system. This may be painful, but there is no other sustainable solution.”