- CNTV English - CCTV News

Homepage > News > Biz >

Local govt. debt crisis unlikely: official

05-18-2010 13:53 BJT

BEIJING, May 18 -- A Chinese local governments’ debt crisis is unlikely to break out in China, but it is worth close attention, Xu Lin, an official from the National Development and Reform Commission, said at a forum Sunday.

Bank regulators and economists say they are increasing concerned that borrowing by local governments is fueling asset bubbles and may lead to a surge in bad debts at the nation’s banks. Local-government entities may have had 11.4 trillion yuan (US$1.7 trillion) in outstanding debt by the end of last year, according to estimates from Northwestern University Professor Victor Shih.

However, according to data from the China Banking Regulatory Commission, China’s outstanding loans to local governments’ financing platforms stood at 7.38 trillion yuan by the end of 2009, rising 70.4 percent year on year.

The risks posed by local government financing vehicles should not be exaggerated, government adviser Ba Shusong also wrote in the Shanghai-based Wenhui Bao last week.

Commercial banks in China are “very cautious” about lending to the investment arms of county-level governments who account for more than 70 percent of all such local authority entities, said Ba, who is deputy director-general of the Financial Research Institute at the State Council Development Research Center.

Very few local governments rely on land transfer income for more than 50 percent of their funding and most have many sources of income, he said.

Editor:Zhang Jingya |Source: Shenzhen Daily

Hot Videos view more

The celebrations are still continuing as the victorious coach, Joachim Loew, has been honored for his achievement in his hometown of Freiburg.
Germany coach Loew honored in hometown of Freiburg

Chinese men´s national team continued its preparations for next year´s Asian Cup, as they managed a one-all draw against visitors Jordan during a football friendly in Harbin, the capital city of Northeast China´s Heilongjiang Province.
China held to 1-1 draw by Jordan

The defending world champs came into the contest with a perfect 6-and-oh record, but they would be in for a tough first half before opening things up in the second.
USA beat Slovenia 119-76 in quarter-finals

Hot Stories more

UK authorities believe killer of James Foley is a British national

Across the UK the hunt is on for James Foley’s killer, who authorities believe is a British national. As Richard Bestic reports from London, Prime Minister David Cameron cut short his summer break to lead his government’s response.

Israeli war jets renews Gaza strike as truce talks stalled

Three Palestinians were killed and 40 others wounded in the intensive Israeli war jets´ airstrikes on the Gaza city on Tuesday night, shortly before an end of a 24-hour ceasefire in the Gaza Strip,

Missouri police arrest dozens after violent night

As the protests in the town of Ferguson, Missouri turned violent with police facing ´heavy gunfire´ from some ´criminal elements´, cops fired tear gas, stun grenades and arrested 31 demonstrators on Monday night.

Picture in news more

More Video News

Choose TV Program