Chinese Local Government: Hidden Debt Expands Rapidly!
ー”Local Financing Platform” LGFV’s Huge Debtー
We will deliver a summary report from the latest article of hisayoshi-katsumata-worldview.
Difficulties in raising funds for the “local financing platform”:
An investment company
established by a Chinese local government for infrastructure development.
Fundraising for the “local financing platform” is facing difficulties.
In fact, financial institutions have stopped lending to the loan platform.
Lending platform to offer bonds for public servants:
There is a growing movement among local governments
to force public officials to purchase bonds issued by the Loan Platform.
If the loan platform fails to repay,
it will be forced into a “situation where public officials become victims of default.”
Bloomberg (July 5th):
We published an article
titled “China considers permitting additional issuance of local government bonds.”
Chinese authorities will allow the issuance of additional municipal bonds
to fund the repayment of LGTV.
It is considering plans to help cash-strapped local governments.
Chinese local government land income:
Local governments raise funds for infrastructure development
through “financing platforms” (LGFV).
Meanwhile,
LGFV’s massive debt is the biggest concern for the Chinese economy.
“The market size of bonds issued by LGFV is $9 trillion (1,290 trillion yen).
” Moreover,
these debts do not appear on the official balance sheets of local governments.
Debt balance of the “financing platform”:
China’s official debt stands at over 300% of GDP.
But the debt associated with the “financing platform” is “hidden debt.”
It is not included in the official debt balance.
This balance is as high as 9 trillion dollars (1,290 trillion yen).
Including this,
China’s outstanding debt to GDP ratio exceeds 350%.
Changes in Chinese government debt balance:
It far exceeds “295% of Japan’s GDP during the bubble period.”
350% Super Excess Debt Repayment:
How will China repay its “excessive debt of 350% of GDP”?
I fell into a situation that made me faint just thinking about it.
Investigate Local Government Hidden Debt:
Chinese authorities have launched a nationwide investigation
to uncover hidden debts of local governments.
China must rebuild local government finances,which are virtually bankrupt.
That is why local governments use unused local bond issuance quotas.
China’s Economy Revealed:
The quagmire of the Chinese economy has been widely recognized.
Expectations for the Chinese economy have plummeted.
The Chinese government has completely misjudged the trends of the times.
China has boasted that it is aiming for world hegemony.
But in rural areas, the world is in a state of apocalypse.
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