Exclusive | Guangdong amasses ¥1 trillion in government debt
Provincial finance department chief says pressures on finances are increasing as spending demands rise and revenue growth slows
Guangdong's government debt swelled last year to "roughly" 1 trillion yuan (HK$1.25 trillion), its financial department chief has said, as the central government tries to defuse the country's 17.9 trillion yuan in local government liabilities.
The total for the province, equal to 15 per cent of its 2014 GDP, was 16 per cent up on the previous year.
Provincial finance department head Zeng Zhiquan revealed the total in an exclusive interview with the South China Morning Post on the sidelines of the National People's Congress this week. He said the Ministry of Finance was still assessing the debt situation reported by regional authorities before final figures were determined. "These are the debts that the Guangdong provincial government has direct responsibility to repay, to provide guarantees for, or even offer a bailout when needed," Zeng said.
The new estimate is about 16 per cent higher than the 862.1 billion yuan worth of debt Guangdong reported at the end of 2013. National GDP gained 7.4 per cent last year, the slowest growth in 24 years.
The share of Guangdong's debt to its GDP is smaller than that of Hainan , the country's first - and so far only - local government to publish its end-of-2014 debt figures. The Hainan government said last month that its debt burden rose to 171.9 billion yuan as of December 2014, equal to 49.1 per cent of its 350 billion yuan GDP last year.
Local authorities were required to submit their debt data to the finance ministry by January 5. Some of the debt might lose government support after the ministry's assessment, which is part of Beijing's plan to bring previously opaque and unregulated local debt back onto balance sheets to improve transparency.