Wednesday, December 06, 2023

China’s Colossal Hidden local and regional government Debt Problem Is Coming to a Head

Bad news for China!

"China is trying to defuse a financial time bomb that could severely damage its banking system.

Cities and provinces across the country have accumulated a massive amount of hidden debt following years of unchecked borrowing and spending. The International Monetary Fund and Wall Street banks estimate that the total outstanding off-balance-sheet government debt is around $7 trillion to $11 trillion. That includes corporate bonds issued by thousands of so-called local-government financing vehicles, which borrowed money to build roads, bridges and other infrastructure, or to fund other expenditures."

China’s Colossal Hidden-Debt Problem Is Coming to a Head - WSJ Mounting financial stress at local governments leads Moody’s to lower its outlook on China’s credit rating

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