China’s mounting local government debt is already a crisis, experts say, with nearly $8 trillion at risk. Bonds issued by local government financing vehicles are on the verge of default amid a broader property market crash.

• China’s mounting local government debt is already a crisis, experts say, with nearly $8 trillion at risk.
• Bonds issued by local government financing vehicles are on the verge of default amid a broader property market crash.
• The grim financial picture comes as Xi Jinping seeks an unprecedented third term as China’s leader.

A local-government debt crisis is getting worse in China, as the property market simultaneously crashes and Beijing contends with the reverberations of its zero-COVID policies.

About $8 trillion of debt has piled up from so-called local government financing vehicles (LGFV), which China has used to pay for infrastructure projects and spur growth since the Great Financial Crisis.

Bonds issued by LGFVs, however, are at risk of defaulting and pose another threat to President Xi Jinping as he pursues an unprecedented third term at the 20th National Congress of the Chinese Communist Party, which began on Sunday.

markets.businessinsider.com/news/bonds/china-debt-crisis-lgfv-bonds-xi-jinping-communist-party-congress-2022-10

🇨🇳 Chinese Junk Bonds Set Record Low as Property Crisis Spreads – Bloomberg
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