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Fitch warns of rising China credit risk

Fitch warns of rising China credit risk

Fitch Ratings says credit risk in China has increased because too many loans have been taken out by local governments.
Thursday's statement by the rating agency comes amid concerns that borrowings by local authorities for expensive public work projects may overwhelm the ability of some local governments to repay banks.
Senior Director Jonathan Lee of Fitch Ratings in Taiwan said a large chunk of the lending has gone into unprofitable infrastructure, raising the prospect of default.
Chinese local governments increased their borrowing after Beijing ordered higher spending in response to the 2008 global financial crisis.
In June, Beijing revealed local governments have piled up 10.7 trillion yuan ($1.6 trillion) in debt, 25 percent of China's annual economic output.


Updated : 2021-04-11 19:16 GMT+08:00