The world's second-largest economy has been struggling to arrest local government debt -- the result of easy credit and round after round of stimulus.
While it's hard to gauge the scale of the problem, a recent government think tank report may shed some light. The Chinese Academy of Social Sciences estimates local government debt reached 19.94 trillion yuan ($3.3 trillion) by the end of 2012. Local government debt accounts for most of total government debt, which is expected to have hit 27.7 trillion yuan ($4.56 trillion), or roughly 53% GD
The report puts local debt at double what it was three years ago, when China last conducted a nationwide debt audit. Results of the most recent government debt audit, launched in July, haven't been released.
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China debt grows to $4.6 trillion
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China debt grows to $4.6 trillion
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Psalm 144:1 A Psalm of David. Blessed be the LORD my strength, which teacheth my hands to war, and my fingers to fight:
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Re: China debt grows to $4.6 trillion
DEBT: The US Vs. China
Heightened volatility in China's short-term interest rates has some people worried that the world's second largest economy is doomed for a credit crisis.
For a discussion on this, check out our Q&A with Patrick Chovanec.
Generally speaking, economists think that China's financial risks are contained, yet they also warn it's something to keep an eye on.
Here's Wells Fargo Securities' quick summary of all the debt in China:
Does China have a debt problem? The answer would appear to be “no” when analyzing the Chinese household and central government (i.e., Beijing) sectors where the debt-to-GDP ratios at present are only 30 percent and 15 percent, respectively. Comparable ratios in the United States are 80 percent and 70 percent, respectively. However, the debt-to-GDP ratio of the Chinese business sector is 140 percent, whereas its American counterpart stands at 80 percent. Although there are few visible signs of financial stress in the Chinese business sector at present, further increases in leverage could eventually spell trouble. Stay tuned.
"Our caution regarding the Chinese debt situation would become more elevated in the future if we see rapid credit growth in conjunction with slow economic growth," wrote Wells Fargo's Jay Bryson.
Read more: http://www.businessinsider.com/outstand ... z2oau0OY3f
Heightened volatility in China's short-term interest rates has some people worried that the world's second largest economy is doomed for a credit crisis.
For a discussion on this, check out our Q&A with Patrick Chovanec.
Generally speaking, economists think that China's financial risks are contained, yet they also warn it's something to keep an eye on.
Here's Wells Fargo Securities' quick summary of all the debt in China:
Does China have a debt problem? The answer would appear to be “no” when analyzing the Chinese household and central government (i.e., Beijing) sectors where the debt-to-GDP ratios at present are only 30 percent and 15 percent, respectively. Comparable ratios in the United States are 80 percent and 70 percent, respectively. However, the debt-to-GDP ratio of the Chinese business sector is 140 percent, whereas its American counterpart stands at 80 percent. Although there are few visible signs of financial stress in the Chinese business sector at present, further increases in leverage could eventually spell trouble. Stay tuned.
"Our caution regarding the Chinese debt situation would become more elevated in the future if we see rapid credit growth in conjunction with slow economic growth," wrote Wells Fargo's Jay Bryson.
Read more: http://www.businessinsider.com/outstand ... z2oau0OY3f
A Co. 3/75 Ranger Regt. HQ Section Dec 85-June 86.
HSC USAITC June 86-April 88
NAVSEA, 2014 to Present
Psalm 144:1 A Psalm of David. Blessed be the LORD my strength, which teacheth my hands to war, and my fingers to fight:
HSC USAITC June 86-April 88
NAVSEA, 2014 to Present
Psalm 144:1 A Psalm of David. Blessed be the LORD my strength, which teacheth my hands to war, and my fingers to fight:
Re: China debt grows to $4.6 trillion
They'll get there soon enough. We did. And everyone knows the Chinese can do anything we can faster and cheaper...
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124 MI(LRSD) 90-91 (Desert Storm)
Repeal the 16th, enforce the 10th.
ΜΩΛΩΝ ΛΑΒΕ
"I come in peace. I didn't bring artillery. But I'm pleading with you, with tears in my eyes: If you fuck with me, I'll kill you all." Gen. James Mattis
Panem Et Circenses
My safe space
- Flesh Thorn
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Re: China debt grows to $4.6 trillion
Those aircraft carriers don't come cheap neither...
A Co. 3/75 Ranger Regt. HQ Section Dec 85-June 86.
HSC USAITC June 86-April 88
NAVSEA, 2014 to Present
Psalm 144:1 A Psalm of David. Blessed be the LORD my strength, which teacheth my hands to war, and my fingers to fight:
HSC USAITC June 86-April 88
NAVSEA, 2014 to Present
Psalm 144:1 A Psalm of David. Blessed be the LORD my strength, which teacheth my hands to war, and my fingers to fight: