China Local Govts Face Rising Difficulties Repaying Debt: Yicai

Chinese local governments are facing increased bond repayment pressure amid falling revenues from land sales due to slumping property markets, while implicit debts piled up in recent years threaten their ability to borrow more, Yicai.com reported citing Ma Guangrong, deputy director of Institute of Public Finance and Taxation at the Renmin University. Local governments are highly dependent on selling land to repay special bonds, with the ratio of such income to general budget revenue rising to 74% from 33% between 2008 to 2020, said Ma. During this period, the debt sustainability index measuring legal and implicit debts fell to 60.1 from 87.7, indicating local governments face persistently rising debt risks and pressure to fiscal sustainability, Ma was reported as saying. Local authorities rely on raising debt to pay for public service and infrastructure investment, the newspaper cited Ma as saying.