Beijing cancels 1800 billion in fake projects that weigh on the state debt
These projects were exploited to raise funds through banned channels, or without a return on investment. The cancellation was to have taken place by March. But in the first 23 days of April another 535 projects were eliminated. In some regions, real local government debt is at least five times declared debt.
Beijing (AsiaNews / Agencies) - The Ministry of Finance has announced that since last November, Chinese local governments have scrapped 1695 public-private projects, worth a total of 1800 billion yuan (about 242 billion euros). If approved, they would have weighed on the state debt, which exceeded 36% of GDP.
Last November, the ministry announced a cut in the approval of public-private projects and a greater verification of their quality. In fact, many of them were being exploited by local governments to raise funds through banned channels, throwing themselves into businesses that do not always guarantee an adequate return on investment.
The economic magazine Caixin noted that although the cancellation of fake projects was supposed to have taken place by March, another 535 projects were cancelled in the first 23 days of April.
At the end of 2017, the state debt was 29.950 billion yuan (about 4027 billion euros), of which 16.5 billion yuan from local governments. But such numbers do not include trillions of yuan of hidden, unregistered debt. According to some analysts close to the government, the hidden debts of some regions are at least five times higher than those declared.
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