Local government debt is controllable and is not likely to trigger a bigger problem, People’s Daily reported Monday, citing Jia Kang, director of the Research Institute for Fiscal Science of the Ministry of Finance. The government’s solvency ratio is relatively strong, backed by a growing economy and cash flow from high-quality infrastructure assets and investments, Jia was quoted as saying. However, Jai said the government should closely watch high-risk projects in certain areas and industries. China’s local government debt is estimated at up to 20 trillion yuan (US$3.28 trillion), Caijing reported on its website, citing Zhu Haibin, chief China economist of JPMorgan Chase China.
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