Posts tagged 'china local government debt'

China’s worried local governments

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Dec 21 2011 21:18 | Comment |

In the steady drip feed of anecdotes about China’s property market, Patrick Chovanec’s blog post earlier this month rounding up a series of first-hand, second-hand and media reports made for some fascinating reading. Chovanec now has a story on Foreign Affairs which builds on this theme, including this summary of why it’s such a big deal:

Understanding how this came to pass means parsing the host of distortions and mind games that characterize China’s real estate market. Residential real estate construction now accounts for nearly ten percent of the country’s total GDP — four percentage points higher than it did at the peak of the U.S. housing bubble in 2005. Bullish analysts have long argued that large-scale urbanization and rapidly rising incomes warrant such an extraordinary boom. Read more

China’s medium-soft landing

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Oct 04 2011 13:00 | Comment |

The bearish-on-China is going all mainstream on us. Or at least, more prominent. For example, 12 per cent of economists in a Bloomberg survey last week believe the country’s growth will fall below 5 per cent.

Well, a more convincing rebuttal to this than a Chinese State Council official comes from Standard Chartered’s chief China economist Stephen Green. Read more

Chinese decoupling, meet Chinese stagflation

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Sep 19 2011 13:06 | Comment |

This China decoupling thing was never really going to take off, was it?

From Bloomberg: Read more

Anatomy of a failed Chinese railway bond

Tracy Alloway used to be deputy editor of FT Alphaville. Here she learned the details of derivatives, the absurdities of accounting and the various structures of ... erm ... structured finance. She now covers big US banks for the FT paper, including Goldman Sachs and Morgan Stanley. She pops up on FT Alphaville every once in a while.

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| Aug 01 2011 11:20 | Comment |

By any account, last month was not a good time to sell a Chinese bond backed by its railways.

A local cash crunch had already limited the pool of available buyers, while concerns about the country’s local government debt problems persist. And that was before Saturday’s fatal train crash in Zhejiang province, which killed at least 40 people and is now being censored by the government. Read more

China pressure points (or lack thereof)

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Jul 12 2011 08:45 | Comment |

After the weekend’s Chinese data indicating both slowing imports and rising inflation, came this on Tuesday:

BEIJING, July 12 (Xinhua) — China’s foreign exchange reserves rose 30.3 percent year-on-year to hit 3.1975 trillion U.S. dollars by the end of June, the People’s Bank of China (PBOC), or the central bank, said Tuesday. Read more

China’s stagflation question

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Jul 11 2011 10:23 | Comment |

You wouldn’t want to be a Chinese local government official, just now:

(Reuters) - China will link local officials’ performance appraisals to the level of debt held by local governments, state media reported Monday, an apparent move to cap borrowing and address worries that possible defaults could damage China’s economy. Read more

The great wall of Chinese worry

| Jul 05 2011 20:01 | Comment |

The big holes in Chinese local government balance sheets are back — and bigger than first thought, according to Moody’s.

As widely reported this morning, the rating agency reviewed the National Audit Office’s report on local government debt and concluded that it underestimates banks’ NPL exposure. Read more

Moody’s says China local debt could be vastly understated

Kate is FT AV’s Asia Correspondent. She joined FT Alphaville in mid-2011 after carrying out various roles in the FT’s London office since 2005: interactive editor, companies reporter, and founding editor of the FT’s Energy Source blog.

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| Jul 05 2011 05:35 | Comment |

Moody’s says China’s local government debt burden may be Rmb3,5oobn ($54bn) larger than auditors estimated, which could threaten banks’ credit ratings. Reuters reports that Moody’s assessment of the estimate by China’s state auditor last month that the country’s local governments have chalked up Rmb10,700bn of debt, Moody’s said it found more potential loans after accounting for discrepencies in figures given by various Chinese authorities. The ratings agency said this could put the non-performing loans ratio as high as 8 to 12 per cent. The additional debt was extrapolated from comparing different assessments of debt levels from the country’s auditor and bank regulator. Bloomberg notes a Bernstein report this week estimated that China’s largest publicly-traded banks could withstand credit losses of up to 27 per cent on their loans to local governments. Read more