There’s no denying it: China’s got a debt problem. The world’s second-largest economy is struggling to contain growing local government debt, the result of easy credit and round after round of stimulus.
Nobody knows the exact scale of the problem, but economists surveyed by CNNMoney estimate debt levels reached 14.1 trillion yuan to 19.7 trillion yuan by the end of last year, or roughly one-third of the country’s gross domestic product.
Those estimates put local debt at nearly double what it was three years ago, when China last conducted a nationwide debt audit. By the end of 2010, Beijing reported 10.72 trillion yuan ($1.7 trillion) of local and regional government debt. In June, the government sampled debt levels in 36 select governments and found their average debt had increased 13% between 2010 and the end of 2012.
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