China's audit of govt debt credit positive
Updated: 2013-08-01 15:09
(Xinhua)
|
|||||||||||
BEIJING -- China's audit of government-related debt obligations is credit positive, as it will improve the transparency of the country's local government debt, Moody's said in a Thursday report.
However, the agency warned that thorough accounting may reveal that local governments carry debt burdens beyond previous estimates.
According to Moody's calculations, China's local government debt was 12.1 trillion yuan ($1.97 trillion) as of the end of 2012.
The National Audit Office (NAO) announced a nationwide audit of government-related debt last Sunday. According to NAO, local government debt totaled 10.7 trillion yuan as of the end of 2010.
In June, NAO published a survey of 36 local governments' debts, which rose 12.9 percent from 2010 to the end of 2012.
Moody's believes the central government will impose additional restraints on the borrowing of local government financing vehicles (LGFVs).
"This may introduce some short-term volatility in debt markets and trigger related liquidity pressure, thereby increasing the refinancing risk for LGFVs," the report said.
"Balance sheet adjustments by local governments will mean a curtailment of investment and add further downward pressure on China's economic growth," it added.
Related Stories
Expert warns local govts unaware of true debt level 2013-07-31 21:19
Nationwide debt audit crucial for policymaking 2013-07-31 10:18
Govt debt and urbanization 2013-07-31 09:49
Local govt debt must be sorted out 2013-07-30 21:34
Govt debt audit to examine risks for sound economy 2013-07-30 11:19
Today's Top News
Most UK companies back EU referendum
UN to probe alleged Syria chemical attacks
Chinese IT firms should fight discrimination
7.5% GDP growth 'in reach' this year
Steel industry eyes plans to resolve oversupply
Surveillance plan files declassified
Xiaomi shifts into low end of mobile sector
Xi vows to protect maritime interests
Hot Topics
Lunar probe , China growth forecasts, Emission rules get tougher, China seen through 'colored lens', International board,
Editor's Picks
Finding inner peace on ocean wave |
Duo find new lives, homes a world apart |
Education overhaul |
Carbon market helps cut emissions |
Attractive Cities for Foreigners |
Terraces on top of the world |