In China, Unweaving the Tangled Web of Local Debt
Jul 17, 2018 | 09:00 GMT
(WANG ZHAO/AFP/Getty Images)
- A slower economy, sluggish construction growth, weaker local government revenue and a sharp jump in maturing debt could boost the risk of default for some local government-related debt, particularly in the central and southwest regions.
- Despite previous announcements, Beijing may step in to assist or even bail out some loans if defaults accelerate.
- The urgency of the risk will compel the central government to accelerate efforts to revamp the country's tax structure, but its ability will be limited by the uncertain economic situation.