One of China’s biggest cities is so cash-strapped it’s calling in debtsWuhan, the largest city in central China, has publicly demanded that hundreds of local companies repay their debts, in an extremely rare move that highlights the dire financial situation facing many of the country’s municipal governments amid economic uncertainty. It urged them to pay their overdue debts as soon as possible. The public appeal by Wuhan, which was at the epicenter of the Covid-19 pandemic that began in late 2019, is highly unusual and underscores the fiscal challenges facing China’s local governments. Analysts estimate China’s outstanding government debts surpassed 123 trillion yuan ($18 trillion) last year, of which nearly $10 trillion is so-called “hidden debt” owed by risky local government financing platforms. Guizhou, one of China’s poorest provinces, publicly admitted defeat in April in trying to sort out its finances and appealed to Beijing for help to avoid default.

Source: CNN May 29, 2023 13:11 UTC