Anticipated higher risk in the local government debts

Zhou Xiaochuan, governor of the People’s Bank of China pointed out in a media briefing on March 13, 2013 that one fifth of loans issued to the local government financing platforms are in risk. Bank of America data show that the size of the net issuance of debt by the Chinese local government financing platforms in 2012 has increased by 179 percent to 1.132 trillion yuan ($ 182 billion), accounting for 50% of the sales volume of corporate debt indicating an enhanced risk.

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