A Missed Tock Of China’s Ticking Debt Bomb

This Bystander is hardly cheered, if not surprised, to read this report via Bloomberg:

China’s local government debt may be almost 3 trillion yuan ($473 billion) higher than the figure given by the nation’s audit office, if loans taken out by township governments are included, the Economic Observer reported, citing research from an independent institute.

Borrowing by townships, an administrative tier of government below provinces, cities and counties, wasn’t included in a report by the National Audit Office in June that put debt from those three levels at 10.7 trillion yuan, the weekly newspaper said in a report on its website dated Nov. 12, citing Beijing Fost Economic Consulting Company.

At a total of 13.7 trillion yuan, or $2.2 trillion for those of you keeping score at home, that is only chump change at that level off Italy’s outstanding sovereign debt ($2.6 trillion). We’ve seen how these ticking debt bombs can upset markets and oust political leaders. China is fortunate not to have a democratically elected government that investors could force to resign, as they did in Italy and Greece.

Advertisements

5 Comments

Filed under Economy

5 responses to “A Missed Tock Of China’s Ticking Debt Bomb

  1. Pingback: China’s Property Bubble: Bursting or Deflating? | China Bystander

  2. Pingback: China Cuts Banks’ Reserve Requirement Ratio | China Bystander

  3. Pingback: Stimulating China’s Economy In And Out Of The Shadows | China Bystander

  4. Pingback: Averting China’s Local Government Defaults | China Bystander

  5. Pingback: Bringing China’s Shadow Banking More Into The Light | China Bystander

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s