Caixin OnlineFinance & EconomicsTop Stories Finance Guangzhou Nears Debt Red Line, Its Figures Show
07.31.2013 17:56

Guangzhou Nears Debt Red Line, Its Figures Show

Prosperous southern city's payment obligations for year approach 20 percent of revenue, raising more worries about local government finances
By staff reporter Wang Jing

(Beijing) – One of the most affluent cities in the country has published figures that indicate it is on the verge of falling short of meeting scheduled debt repayment.

This comes amid mounting concern that local governments may have trouble paying off the debts they racked up in recent years amid spending intended to stimulate the economy.

Guangzhou, the capital of Guangdong Province with a GDP that ranked third last year among all Chinese cities, said on July 30 that it needs to pay loans worth almost 26.1 billion yuan this year. That is 19.37 percent of the city government's projected income for this year. The internationally accepted red line for this ratio is 20 percent.

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