Economics
Here's Where China's Debt Iceberg Shows the Biggest Risk
- Tianjin, Chongqing, Jiangsu see higher LGFV bonds to GDP ratio
- Lowest-rated borrowers found in areas with big state presence
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In China’s financial system, the bigger the role of the state, the cheaper the funding costs. As a rule. But in one corner of the country’s $13 trillion bond market, something different has happened.
The highest yields in the 7.5 trillion yuan ($1.1 trillion) worth of debt sold by local government financing vehicles are found on the securities sold in regions where the public sector dominates the economy.