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E-mail China Daily, November 9, 2012
China's local debt level has been decreasing over the past two years and the property loan risk is under control, China's top banking regulator said on Thursday.
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Delegates from the country's top financial organizations discuss Hu Jintao's report at the 18th Party Congress on Thursday. From left, China Investment Corp Chairman Lou Jiwei, China Securities Regulatory Commission Chairman Guo Shuqing, People's Bank of China Governor Zhou Xiaochuan and China Banking Regulatory Commission Chairman Shang Fulin. Xu Jingxing / China Daily |
The whole of the country's local government debt amounted to 9.25 trillion yuan ($1.48 trillion) at the end of September, Shang Fulin, chairman of the China Banking Regulatory Commission, said during a session of the 18th National Congress of the Communist Party of China, which opened on Thursday.
This was the first update on local government debt since the figure 10.7 trillion yuan was released at the end of 2010.
"The scale (of local debt) hasn't changed much from the previous year ... The current goal is still to control the increments," Shang said.
Moreover, the debt structure has changed, as the majority of debt has been transferred to the provincial level from the city and county level, lowering the risk, Shang said.
But local governments still have a healthy cash flow of 9 trillion yuan, or 97.3 percent of the total debt, for repaying capability, he said, and "the local debt issue will be solved after some time".
Shang said the scale of housing loans in China was 11.7 trillion yuan by the end of September, accounting for 19.09 percent of the country's total loan balances, a much lower level than the global average.
Meanwhile, a relatively small proportion of property purchases are financed with mortgages and defaults are rarely seen, he said, adding that housing loans will still be carefully monitored among new loans.
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