BEIJING, March 6 (Xinhua) — China’s government debt amounts to about 17.5 trillion yuan (2.78 trillion U.S. dollars), about 43 percent of the country’s gross domestic product, Yang Kaisheng, president of the Industrial and Commercial Bank of China, said Tuesday.
The debt is composed of 10.7 trillion yuan of local government debt and 6.8 trillion yuan of central government debt, Yang said at a press conference on the sidelines of China’s annual parliamentary session.
“Government debt in China now is at a controllable and secure level,” said the banking magnate, citing the government work report delivered by Premier Wen Jiabao on Monday.
The 43 percent debt-GDP ratio is well below the world’s average, according to Yang, who added that it is also lower than the 180 percent and 83.2 percent ratios in Japan and Germany, respectively, whose GDP is similar to that of China.
In the past five to six years, China’s fiscal revenues registered a compound annual growth rate of 22 percent, which means the government is capable of paying off its debt, said Yang, a member of the National Committee of the Chinese People’s Political Consultative Conference, the top political advisory body.
He estimated that among the 10.7-trillion-yuan local government debt, only about 4 percent is held directly by local governments, while the rest is debted by local financing platforms and companies set up by governments.
“From either a macro or micro statistical point of view, the risks of local financing platforms are under control and generally secure,” Yang said.
Wen said in the government work report, “We fully audited local government debt in a timely manner, and obtained a clear picture of the total amount, due dates, geographic distribution and causes of the debts local governments incurred over the years.”
However, the premier also warned that the debts also contained risks and hidden dangers, and some localities with poor ability to pay their debts were at risk of default.