¥3.2 Trillion in Debt For This Province! First One to Go Bankrupt? Local Gov Challenged Central Gov

¥3.2 Trillion in Debt For This Province! First One to Go Bankrupt? Local Gov Challenged Central Gov

¥3.2 Trillion in Debt For This Province! First One to Go Bankrupt? Local Gov Challenged Central Gov

Current data reveals that Guizhou's debt-to-local GDP ratio is the second-worst in China, with a debt rate of 63.6%, leaving the province unable to repay its debt, even the interest. Despite the prevalence of this issue across numerous Chinese provinces, one may wonder why Guizhou chose to disclose its predicament at this time. Analysts have highlighted that the debts burdening Guizhou Province were predominantly incurred by previous administrations and bear no relation to the current leadership. During the years of China's economic growth, Guizhou's debt interest could be serviced through central transfer payments. However, with the economy now in decline, the funds provided by the central government are insufficient to cover interest payments. The current administration seeks to uncover the root causes of these issues and make them public, thereby clarifying that the debts are a legacy of previous administrations. At the same time, they aim to secure policy support from the central government to continue borrowing for development.