Concerns over China\u2019s local-level debt have long loomed large in international discourse, with a mountain of \u201chidden\u201d debt viewed as a \u201cticking time bomb\u201d that threatens to trigger a cascade of defaults while posing a risk to financial stability.<\/p>\n
But some experts now contend that, after a sweeping debt-restructuring campaign, the outlook for China is shifting. And they say that, by comparison, the debt challenges facing the United States are causing considerable alarm.<\/p>\n
\u201cAfter years of effort, the overall debt risks of local governments in China have been brought under control and are gradually being resolved,\u201d said Zhao Xijun, a finance professor at Renmin University in Beijing.<\/p>\n
He added that China\u2019s debt is largely held by local governments, giving the central government room to step in and assist with repayment. In the US, by contrast, the burden sits at the federal level \u2013 a situation he called \u201cmore concerning\u201d.<\/p>\n
Late last year, China rolled out a 12 trillion yuan (US$1.67 trillion) debt swap \u2013 a move that significantly eased repayment pressure on local authorities, with the Ministry of Finance identifying 14.3 trillion yuan in hidden local government debt by the end of 2023, much of it accumulated through local government financing vehicles<\/a> (LGFVs).<\/p>\n The swap has enabled local governments to extend repayments, with the weighted average maturity of bond issuance lengthening by 3.18 years, year on year, to 15.88 years in the first half of 2025, Beijing-based China Chengxin International Credit Rating (CCXI) said in a note last month.<\/p>\n","protected":false},"excerpt":{"rendered":"Concerns over China\u2019s local-level debt have long loomed large in international discourse, with a mountain of \u201chidden\u201d debt…\n","protected":false},"author":2,"featured_media":64767,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[47797,15935,550,28,144,47801,101,11,47793,44452,2938,47799,47794,47798,29243,47800,21,47795,47796],"class_list":["post-64766","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-alicia-garcia-herrero","tag-asia-pacific-region","tag-beijing","tag-business","tag-china","tag-china-chengxin-international-credit-rating-ccxi","tag-economy","tag-elon-musk","tag-inner-mongolia","tag-international-monetary-fund","tag-jerome-powell","tag-liu-kun","tag-ministry-of-finance","tag-natixis","tag-ray-dalio","tag-renmin-university","tag-united-states","tag-us-treasury","tag-zhao-xijun"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/64766","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=64766"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/64766\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/64767"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=64766"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=64766"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=64766"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}