China still confident in government debt level
May 30, 2016 Category Finance, Weekly
China said that its overall government debt level remains controllable and there is still room for further increasing debt. The Ministry of Finance said that by the end of 2015, the central government debts “subject to budgetary management” totaled CNY10.66 trillion, while such debts of local governments were CNY16 trillion. Combined, they account for 39.4% of China’s GDP, it said. China’s overall government debt ratio was about 41.5% in 2015, lower than the warning line of the EU, which is 60%, the Ministry said. The ratio was also lower than that of major and emerging market economies. Last year, the local government debt ratio was 89.2%, which is also lower than the generally accepted warning line of the international community. China’s local government debts are backed by high-quality assets, so their repayment is not considered to be a big problem. The repayment will also be supported by China’s expected medium to high economic growth, the Ministry of Finance said.
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