To Fix China Fiscal Crisis, Experts Call for Taxes, Asset Sales
- Reducing layers of government can also help: ex-PBOC adviser
- More transfer payments only way out in short term: StanChart
Xi Jinping
Source: Bloomberg
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China’s provincial governments are facing unprecedented debt burdens following a collapse in land sales, a slowing economy and increased spending on Covid testing and lockdowns over the years.
Investors are becoming increasingly worried about the massive debt pile, which Goldman Sachs Group Inc. estimated this week has reached $23 trillion — or 126% of GDP — if off-budget borrowing by local governments are included. Curbing local debt risks was also highlighted by President Xi Jinping as a key challenge officials must tackle this year.