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China Wuhan Debt-to-GDP Ratio at 185.64Pct

09-02 15:24 Caijing
The lcoal government's debt-to-GDP ratio was 1.5 times higher than the U.S. red line on government debt levels.

Debt-to-GDP ratio in Wuhan, the capital city of South China's Hubei province, could stand out at 185.64 percent, among the highest in Chinese cities, local media said.

The city is one of a lengthy list of Chinese cities which are under the inspection of the National Audit Office for their debt piles, starting from early August amid fears of a government debt crisis.

Local government of Wuhan has amassed a huge amount of debt in recent years due to aggressive urban construction, with statistics showing ending June 2012, the city had 203.7 billion yuan in debt outstanding.

The figure was slightly higher than the level seen at the end of 2011, at 196.5 billion yuan, reports say, quoting a research report at the finance ministry's Hubei office.

With the city's then GDP at 105.8 billion yuan, the government's debt-to-GDP ratio stood at 185.64 percent, 1.5 times higher than the U.S. red line on government debt levels.

The city has more than 10 Local Government Financing Vehicles (LGFVs), the largest of which alone owed 116.9 billion yuan at the end of 2012.

A previous audit, which spanned from the end of 2012 to the early 2013, found that nine of over 30 capital cities in China carried a debt ratio of more than 100 percent, with the highest at 188.95 percent.

Results of the new round of auditing would be announced as soon as in November, when China kicks off the Third Plenary Session of the 18th Central Committee of the Communist Party, according to local media.

 

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