Government debt in China’s eastern Jiangsu province is under control and at a manageable and “appropriate” level for its economy, a Chinese newspaper on Tuesday quoted a senior local official as saying.
The report in the 21st Century Business Herald contained the first public comment from an official in Jiangsu since Reuters in July reported that it may be the “standout debt risk” among China’s 31 provinces.
Tuesday’s newspaper report, citing unidentified sources, said outstanding bank loans of 752 local government financing vehicles in Jiangsu reached 770.6 billion yuan (HK$975.89 billion) by the end of June, up 2.7 per cent from the beginning of this year.
Aside from bank loans, Jiangsu government financing vehicles have also raised a total of 576.8 billion yuan via alternative channels such as wealth management and trust products by June, according to the paper. In the first six months of this year, local authorities borrowed 135.4 billion yuan through these channels, it said, without citing sources.
“The debt scale of Jiangsu province is matched by the size of its economy and supported by real demand, and the level is appropriate,” Liu Handong, head of the Jiangsu Provincial Department of Finance, was quoted by the Guangdong-based paper as saying.
“The risks of local government debt in Jiangsu are manageable,” Liu said.