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China’s cabinet curbs debt growth in 12 “high risk” regions

Government

Reuters exclusively reported China’s cabinet has restricted the ability of local governments in 12 heavily indebted regions to take on new debt and placed limits on what new state-funded projects they can launch. 

Market Impact

Local government debt loads are far higher than at the central government level. While central government debt is only 21% OF GDP, local debt reached 92 trillion yuan ($12.58 trillion), or 76% of the country’s economic output in 2022, up from 62.2% in 2019. The massive piles of debt highlights local governments’ financial stress, fueling concerns of a systemic financial crisis.

Article Tags

Topics of Interest: Government

Type: Reuters Best

Sectors: Economy & PolicyGovernment & Public Services

Regions: Asia

Countries: China

Win Types: Exclusivity

Story Types: Exclusive / Scoop

Media Types: Text

Customer Impact: Significant National Story


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