Title: How much debt does China have? No one knows exactly! — Quartz
Headings: How much debt does China have? No one knows exactly!
How much debt does China have? No one knows exactly!
Content: At least that’s what analysts at credit rating agency Standard & Poor’s said in a report this morning in which they affirmed their credit rating of the People’s Republic of China, largely due to expectations that continued economic growth will keep the country’s debt load quite low. They wrote: We project general government debt to increase by an average amount equal to 1.4% of GDP each year over 2012-2015. General government debt should continue to fall as a share of GDP, with the net general government debt declining to close to 13.4% of GDP by 2014. However, we believe China’s fiscal position to be somewhat weaker than these indicators suggest. Local governments in the country owe significant off-budget debt. Much of these debts belong to enterprises that these lower-level governments own. The lack of timely and regularly available data, as well as questions regarding the legal responsibilities of local governments for these debts, makes external monitoring of such debts extremely difficult. More generally, the restricted flow of information and lack of transparency in China lessens support for the government’s credit standing. External analysts are less likely to be able to detect early any developments that affect the ability of sovereigns to service debt.