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China Starts Assessing Debt Owed by Local Governments

The Economic Observer, a Chinese newspaper focused on economics, reported that Zhengzhou City (Henan Province), Tianjin, and some other places have required district and county governments to make an assessment of money they owe to the private real estate enterprises.

A number of private real estate enterprises told The Economic Observer that local city governments owe them in the range of 1 – 2 billion yuan (US$140 – 280 million). These arrears include commitments to return land premiums, land tax rebates, government-subsidized housing construction deposits, land cleaning advances, et cetera.

On August 3, Pan Gongsheng, the Party Secretary and Governor of the People’s Bank of China, presided over a symposium on financial support for the development of private enterprises. According to a person familiar with the matter, some companies attending the symposium complained about problems with local government debt.

Source: The Economic Observer, August 22, 2023