About 3 trillion yuan worth of bonds sold by local government financing vehicles will mature annually until 2025, and repayment pressure is mounting on regional authorities as other revenue streams fail to fill the coffers. Illustration: Lau Ka-kuen
About 3 trillion yuan worth of bonds sold by local government financing vehicles will mature annually until 2025, and repayment pressure is mounting on regional authorities as other revenue streams fail to fill the coffers. Illustration: Lau Ka-kuen

China economy: financial distress of local governments raises debt-default risks, weighs on average Chinese

  • With local-level coffers running low amid China’s property woes and zero-Covid restrictions, some governments are trying to save money by passing on costs
  • There are also rising concerns other public services, such as transport, may see budgetary cuts

About 3 trillion yuan worth of bonds sold by local government financing vehicles will mature annually until 2025, and repayment pressure is mounting on regional authorities as other revenue streams fail to fill the coffers. Illustration: Lau Ka-kuen
About 3 trillion yuan worth of bonds sold by local government financing vehicles will mature annually until 2025, and repayment pressure is mounting on regional authorities as other revenue streams fail to fill the coffers. Illustration: Lau Ka-kuen
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