Chinese Think Tank: "Local Government Bonds Worth 15 Trillion Yuan to Mature Within 3 Years"

[Photo by AP Yonhap News]

[Asia Economy Reporter Park Byung-hee] China's local governments are expected to face a total bond maturity of 15 trillion yuan within the next three years, warned the China Academy of Fiscal Sciences (CAFS), a think tank under the Ministry of Finance.

According to Bloomberg on the 17th (local time), CAFS analyzed that Chinese local governments currently hold bonds worth 30 trillion yuan, about half of which will mature within three years.

CAFS representative Liu Shangshi said at a forum held in Beijing on the 14th, "Chinese local governments are currently under significant fiscal pressure due to the large-scale bond maturities." Liu pointed out, "Although the average interest rate on local government bonds is below 4%, the interest rates are rising rapidly as the debt scale increases."

According to statistics from the Chinese Ministry of Finance, the cost used for bond interest payments by all levels of government in China, including central and local governments, from January to November last year was about 964 billion yuan, an increase of 6.6% compared to the same period in 2020.

Representative Liu warned, "Various risk factors that could threaten the Chinese economy are emerging, such as the spread of COVID-19, macroeconomic risks, and fiscal risks of local governments."

This content was produced with the assistance of AI translation services.