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31 Dec 2013
Audit shows ballooning Chinese local government debt
FXstreet.com (London) - Figures released yesterday by the Chinese National Audit Office showed that local government debt had swelled by 70 percent compared with the last audit carried out three years ago.
China has local government debts of CNY17.7 trillion (USD2.9 trillion), China is running a government debt of around 58 percent of GDP.
Debts, including CNY4.3 trillion of contingent liabilities, rose 13 percent in the first half of 2013.
The study of 62,215 government agencies suggests that China may be heading into a similar trap to Japan and others hit by the Asian Crisis.
The audit office report maintained that government debt risks were broadly under control, but that “there are potential risks in some places”.
The audit follows the quarterly China Beige Book survey released on 18 December, which indicated that number of firms getting new credit shrank for the seventh consecutive quarter while the proportion of loans going to debt rollovers increased.
China has local government debts of CNY17.7 trillion (USD2.9 trillion), China is running a government debt of around 58 percent of GDP.
Debts, including CNY4.3 trillion of contingent liabilities, rose 13 percent in the first half of 2013.
The study of 62,215 government agencies suggests that China may be heading into a similar trap to Japan and others hit by the Asian Crisis.
The audit office report maintained that government debt risks were broadly under control, but that “there are potential risks in some places”.
The audit follows the quarterly China Beige Book survey released on 18 December, which indicated that number of firms getting new credit shrank for the seventh consecutive quarter while the proportion of loans going to debt rollovers increased.