China Debt Blowout Rings Alarm Bells as Leadership Meets
- More than half of local governments breach debt thresholds
- Provinces may curb spending, PBOC may keep rates low
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When China’s leaders gather in Beijing for the annual parliament next week, one of the biggest economic risks they’ll need to tackle is the mounting debt of provinces.
A majority of regional governments — at least 17 out 31 — are facing a serious funding squeeze, with outstanding borrowing exceeding 120% of income in 2022, according to Bloomberg calculations based on available official data. That’s the threshold set by the Ministry of Finance to indicate disproportionately high debt risks.