Subscribe free to our newsletters via your
. Earth Science News .

China says local government debt soars
by Staff Writers
Beijing (AFP) Dec 30, 2013

China holds ex-security chief's colleague over graft
Beijing (AFP) Dec 30, 2013 - A former close colleague of China's ex-chief of internal security Zhou Yongkang is under investigation for "law and discipline violations", authorities have announced, stepping up anti-corruption inquiries another notch.

Li Chongxi, chairman of the Sichuan province Political Consultative Conference -- a debating chamber that is part of the Communist Party-controlled governmental structure -- is being probed for "suspected severe violation of discipline and the law", the ruling party's Central Commission for Discipline Inspection said.

The phrase is commonly used as a euphemism for corruption.

No further details were provided in the announcement Sunday.

Li, 62, was the chief secretary of Sichuan's party apparatus when Zhou was the Communist number one in the province from 1999 to 2002, according to the two officials' biographies carried on state-run news portals and

Li was promoted to be the vice party chief of the province in 2002, before he took other posts and then his current position, which is at the ministerial level, this year.

He has become at least the 18th official at vice-ministerial level or above to fall since a once-in-a-decade power transition in November last year that anointed Xi Jinping as the ruling party's general secretary.

Among the 18 at least five are believed to have been proteges of Zhou, who is a former member of the all-powerful Politburo Standing Committee and one of China's strongest politicians of the past decade.

The New York Times earlier this month cited "sources with elite political ties" as saying that Xi has given the go-ahead for a corruption investigation into Zhou himself.

It would be the first time in decades that such a high-ranking figure has been targeted in a formal inquiry, which would unmistakably send shockwaves through China's elite.

Xi, who became head of the state in March, has warned that corruption could destroy the party and threatened to crack down on high-ranking officials, described as "tigers", along with low-level "flies".

High-profile cases that have emerged over the past year include the sacking of Jiang Jiemin, head of China's state-owned assets watchdog, and Li Dongsheng, formerly a vice minister of public security.

But critics say no systemic reforms have been introduced to increase transparency to help fight endemic graft.

China on Monday announced the results of a long-awaited debt audit, revealing that liabilities carried by local governments ballooned to 17.9 trillion yuan ($2.95 trillion) as of the end of June.

The figure, released by the National Audit Office in a statement on its website, compared with 10.7 trillion yuan as of the end of 2010 -- an increase of 67 percent.

Concerns have grown at the amount of debt in the country and its potential impact on the world's second-largest economy, and Beijing embarked on the audit in late July.

Disquiet centres on borrowing by local authorities, which have long used debt to fuel growth in their regions, often by pursuing projects that are not economically viable or sustainable.

China's debt problem is considered to be a serious potential drag on its economy unless steps are taken to rein it in.

The local government debt burden was generally in line with economist estimates, if slightly higher, including one made in early October by Bank of America Merrill Lynch of 17.2 trillion yuan.

"We believe the markets and the Chinese government should be alarmed by the rapidly rising leverage, but we do not believe China is on the brink of a debt crisis, especially if the new leaders can take decisive measures to arrest its rising leverage," Lu Ting, economist at Bank of America Merrill Lynch in Hong Kong, said in a note Monday.

Lu cited the central government's "very low" ratio of debt to gross domestic product (GDP) at 21 percent.

Since almost all government debt is denominated in China's own currency and owned domestically, "the People's Bank of China (central bank) can prevent a public debt crisis with its unlimited capability for liquidity supply", he said.

He added that China is protected by a trove of national savings which include $3.5 trillion in foreign exchange reserves, its central and local governments' own solid assets, and the country's still-high economic and fiscal revenue growth.

The National Audit Office also said that direct government liabilities at both central and local level came to 20.7 trillion yuan as of the end of June.

That figure amounts to 40 percent of China's GDP, according to economists Liu Li-Gang and Zhou Hao at ANZ bank.

But if contingent liabilities are included, the amount would exceed 30 trillion yuan, they said, adding the total would be equal to as much as 55 percent of GDP.

"It is worth noting that this is the first time China is releasing total government debt figures," they said in a report.

The results also raised questions, they said.

"It is still not clear whether the two sets of figures are statistically comparable," Liu and Zhou said of the local government debt figure comparisons between the end of June 2013 and the close of 2010.

While debt has helped the investment-based economy expand strongly, economists and the government itself believe it is unsustainable and the growth model should be rebalanced towards consumer demand.

Highlighting the sensitivity of the audit, the National Audit Office said in July that the endeavour has been ordered by the State Council, or cabinet, which is headed by Premier Li Keqiang.


Related Links
The Economy

Comment on this article via your Facebook, Yahoo, AOL, Hotmail login.

Share this article via these popular social media networks DiggDigg RedditReddit GoogleGoogle

Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News

Japan OKs record budget, sees deflation threat recede
Tokyo (AFP) Dec 24, 2013
Japan approved its biggest ever budget Tuesday, as an improving economy and a sales tax hike made room for more defence spending and the first step towards achieving a balanced budget. Prime Minister Shinzo Abe's cabinet rubber-stamped a plan that will see the government spend 95.88 trillion yen ($922 billion) in the year from April 2014, up from 92.61 trillion yen the previous year. The ... read more

Typhoon brings unexpected medical relief to Philippine town

South African Trauma Center Launches Portable Electronic Trauma Health Record Application

Haitian president urges his country to come together

Hundreds of corpses unburied after Philippine typhoon

Computers search for 'cheapium' versions of expensive materials

New computer memory can hold data 20 years without power

AVX Announces Market Introduction of First Space-Level BME MLCC

3D-printed components flown in British fighter jet

Senegal to fine Russian ship for 'fishing illegally'

Local factors cause dramatic spikes in coastal ocean acidity

Los Angeles likely to score driest year since record-keeping began

Major reductions in seafloor marine life from climate change by 2100

US icebreaker heads to Antarctic to help stuck ships

Chinese ship used in Antarctic rescue stuck in ice

Antarctic rescue bid back on as Chinese helicopter flies in

Scientists aboard ship trapped in the Antarctica ring in New Year

Chinese scientists create high-yield, salt-resistant rice variety

Hong Kong arrests 64 for smuggling baby formula

Fox meat makes an ass of Wal-Mart's China donkey product

To grow or to defend: How plants decide

Longmanshen fault zone still hazardous

One dead as cyclone skims France's Reunion island

Indonesian volcano erupts 30 times as 20,000 displaced

15 hurt as powerful cyclone brushes France's Reunion island

Fighting across South Sudan despite peace talks: army

Attacks on Chadians in C.Africa will not go 'unpunished': president

C. Africa won't sap France's military: minister

Seven die in Cameroon clash between army and C.Africa gunmen

Money Talks When Ancient Antioch Meets Google Earth

Reading a good book may make permanent changes to your brain

Finnish research team reveals how emotions are mapped in the body

What Does Compassion Sound Like?

The content herein, unless otherwise known to be public domain, are Copyright 1995-2014 - Space Media Network. AFP, UPI and IANS news wire stories are copyright Agence France-Presse, United Press International and Indo-Asia News Service. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by Space Media Network on any Web page published or hosted by Space Media Network. Privacy Statement