Officials in Wuhan – where the Covid pandemic started in late 2019, and one of the biggest cities in central China – have called for 259 local companies to pay debts of over 100 million yuan ($14 million) combined, according to a report by CNN, which cited the official Changjiang Daily newspaper and said this “extremely rare move” highlights the dire financial situation of many of local governments across the country.
China’s outstanding government debts were estimated to have topped 123 trillion yuan ($18 trillion) in 2022 and more than half of that is said to be “hidden debt” – nearly $10 trillion – held by financing platforms run by local governments, the report said, adding that municipal authorities’ coffers have been hit hard since the crackdown on huge debts in the real estate sector, which has reduced the tax revenue from land sales that was previously a strong source of income for provincial governments.
The read the full report: CNN.
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