Gross domestic product | CHINDIA ALERT: You'll be living in their world, very soon

Chindia Alert: You’ll be Living in their World Very Soon

aims to alert you to the threats and opportunities that China and India present. China and India require serious attention; case of ‘hidden dragon and crouching tiger’.

Without this attention, governments, businesses and, indeed, individuals may find themselves at a great disadvantage sooner rather than later.

The POSTs (front webpages) are mainly 'cuttings' from reliable sources, updated continuously.

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* China’s debt-to-GDP ratio hits 43%

China Daily: “China‘s government debt amounts to about 17.5 trillion yuan ($2.78 trillion), 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 ($1.7 trillion) of local government debt and 6.8 trillion yuan ($1.07 trillion) of central government debt, Yang said at a press conference on the sidelines of China’s annual parliamentary session.”.

via China’s debt-to-GDP ratio hits 43%|Economy|chinadaily.com.cn.

This is shocking news as a year ago (2010) the ratio was only 17.5%! Of course, earlier we blogged about the parlous state of local government debt rising astronomically. This is the result. ;-(

See: http://www.economicshelp.org/blog/774/economics/list-of-national-debt-by-country/

Some of us are so riveted by China’s trade surplus of some $3 trillion, that we forget about its debt ratio. In other words, China is behaving only slightly more frugally than many Western nations. The only difference *and it is an important one) uis that the trade surplus does (just about) cover the debt. 😉

Posted in China alert, Economics | Leave a Comment »

Tags: Business, China, Debt, Debt-to-GDP ratio, Financial Planning, Financial Services, Gross domestic product, Industrial and Commercial Bank of China

04/03/2012

* Chinese defence budget exceeds $100bn (against US budget of over $700bn)

Extract from Xinhua: “China said Sunday it plans to raise its defense budget by 11.2 % to 670 billion yuan (106.4 billion U.S. dollars) in 2012. …

China’s military spending mainly comprises the living expenditures of service people, expenses for training and maintenance, and spending on equipment, he said. The costs for research, experiment, procurement, repair, transport and storage of all weapons and equipment, including new types of weapons, are included in the defense budget that is published every year, the spokesman said.

… Compared to other major countries, China’s military spending is low given its population of 1.3 billion, vast land area and long coastlines, Li said. While China’s military spending amounted to 1.28 % of its GDP in 2011, that of the United States, Britain and other countries all exceed 2 %, said Li. …

By June last year, China had sent a total of 2,044 peace-keeping personnel to 12 peace-keeping zones around the world, and the Chinese navy has sent escort vessels to the Gulf of Aden and waters off the coast of Somalia to protect thousands of commercial vessels from China and other countries, according to Li.”

http://news.xinhuanet.com/english/china/2012-03/04/c_131445012.htm

A significant rise. But still less than 1/7 of US spend, though the latter is expected to halve over the next few years. Also, salary and living expenses for up to 3 million service personnel does cost a pretty penny!

Posted in China alert, Defence, Military | Leave a Comment »

Tags: Beijing, China, Gross domestic product, gulf of aden, Military budget, Military budget of the People's Republic of China, National People's Congress, Somalia, United States, Xinhua News Agency

02/03/2012

* China to boost local govt debt (of over USD 1.5 trillion) clean-up

China Daily: “China will boost the clean-up of thousands of millions of local government’s debt in 2012, so to guard against possible defaults that would hurt its banks, the country’s bankingregulator said Thursday.

The country will focus on cleaning up old loans made to local government financing vehicles(LGFV) while tightening new debt issues and raising cash to debt coverage ratios, China Banking Regulatory Commission (CBRC) said on its website.

The CBRC will strictly control the use of LGFV loans, while giving priority to key projects that are under construction, it said. The regulator will also improve risk monitoring and reclassify LGFV loans to relieve pressure from banks.

Local government debts had risen to 10.72 trillion yuan (1.7 trillion US dollars) by the end of 2010, accounting for about 26.9 percent of China’s gross domestic product, according to data released by the National Audit Office.

Analysts fret that if a certain proportion of the loans have gone sour, it will push up non-performing loan ratios in the banking industry and threaten banks’ credit ratings.

Local governments typically invested the money they borrowed in building infrastructure. They also faced huge repayment pressure in 2011 and now also in 2012.”

http://www.chinadaily.com.cn/china/2012-03/02/content_14735361.htm

China is taking steps to rein in the extraordinary splurge it generated in the aftermath of the 2008-09 financial crisis by encouraging local government initiatives. It is primarily this LG debt that has caused China’s debt to GDP ratio to increase from less than 20% to over 40 % in two years.

Posted in China alert, Economics, Good news | Leave a Comment »

Tags: Bank, China, China Banking Regulatory Commission, Debt, Gross domestic product, LGFV, Loan, Local government, local government debt, National Audit Office

CHINDIA ALERT: You'll be living in their world, very soon

Chindia Alert: You’ll be Living in their World Very Soon

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* China’s debt-to-GDP ratio hits 43%

* Chinese defence budget exceeds $100bn (against US budget of over $700bn)

* China to boost local govt debt (of over USD 1.5 trillion) clean-up

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