China's Indebted Provinces Face Economic Slowdown as Debt Burdens Mount
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China's poorest regions like Tianjin, Guizhou, Yunnan, and others face economic slowdown due to high debt levels. Their investments and growth are declining.
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Many provinces owe far more debt than their fiscal revenues can cover. Tianjin's debt is almost 3 times its revenue.
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Indebted provinces are issuing new bonds to repay old debts, raising concerns about a vicious debt cycle.
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Questions remain if Beijing’s debt-swap plan is sufficient to resolve the crisis. More asset sales and private investment may be needed.
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Central government announced 1 trillion yuan sovereign debt plan to help local authorities’ reconstruction without adding to their debt burden.
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