The Wall Street Journal (gated) with this ICYMI., citing surveys by a US research firm and S&P reports..
- Two-thirds of local governments are now in danger of breaching unofficial debt thresholds set by Beijing to signify severe funding stress
- their outstanding debt exceeding 120% of income last year
- About a third of China’s major cities are struggling to pay just the interest on debt they owe
- about 84% of the $84.2 billion in offshore debt owed by local government financing vehicles will mature between this year and 2025
The Journal adds:
- The main concern isn’t that cities will default and trigger a financial crisis, though economists say that can’t be ruled out. It is that cities will have to keep cutting spending, delay investments or take other actions to keep creditors at bay, impairing growth for years.
More at that link above.
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While China's GDP target announced over the weekend was disappointing (expectations were higher) this might be one reason for that. It puts a cloud over China stocks, China-proxy trades such as AUD, and commodity demand.
