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Xinhua: Nine Cities’ Assets Not Enough to Pay All Their Debts

Xinhua recently reported on the comments that a high ranking official of the National Audit Office made anonymously regarding local government debts. The official suggested that nine provinces’ capital cities suffered a debt level that exceeded 100 percent of their assets, which indicated a technical bankruptcy. However there has been no word from the National Audit Office on the names of these cities. Starting August 1, the Office conducted a sudden nationwide audit campaign on local governments’ debts. It has been a long term challenge for the central government to understand the size of the local governments’ debts due to the significant lack of transparency about local loans. Some professional firms identified the top 10 most likely cities based on available data: Nanjing, Chengdu, Guangzhou, Hefei, Kunming, Changsha, Wuhan, Haerbin, Xi’an, and Lanzhou. However the State Council Information Office stated, “China will never have the kind of bankruptcy Detroit just had.”
Source: Xinhua, August 6, 2013