China Wuhan Debt-to-GDP Ratio at 185.64%

China Wuhan Debt-to-GDP Ratio at 185.64Pct

09-02 15:24 Caijing

The lcoal government’s debt-to-GDP ratio was 1.5 times higher than the U.S. red line on government debt levels. Debt-to-GDP ratio in Wuhan, the capital city of South China’s Hubei province, could stand out at 185.64 percent, among the highest in Chinese cities, local media said. The city is one of a lengthy list of Chinese cities which are under the inspection of the National Audit Office for their debt piles, starting from early August amid fears of a government debt crisis. Local government of Wuhan has amassed a huge amount of debt in recent years due to aggressive urban construction, with statistics showing ending June 2012, the city had 203.7 billion yuan in debt outstanding.The figure was slightly higher than the level seen at the end of 2011, at 196.5 billion yuan, reports say, quoting a research report at the finance ministry’s Hubei office.

With the city’s then GDP at 105.8 billion yuan, the government’s debt-to-GDP ratio stood at 185.64 percent, 1.5 times higher than the U.S. red line on government debt levels.

The city has more than 10 Local Government Financing Vehicles (LGFVs), the largest of which alone owed 116.9 billion yuan at the end of 2012.

A previous audit, which spanned from the end of 2012 to the early 2013, found that nine of over 30 capital cities in China carried a debt ratio of more than 100 percent, with the highest at 188.95 percent.

Results of the new round of auditing would be announced as soon as in November, when China kicks off the Third Plenary Session of the 18th Central Committee of the Communist Party, according to local media.

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Kee Koon Boon (“KB”) is the co-founder and director of HERO Investment Management which provides specialized fund management and investment advisory services to the ARCHEA Asia HERO Innovators Fund (, the only Asian SMID-cap tech-focused fund in the industry. KB is an internationally featured investor rooted in the principles of value investing for over a decade as a fund manager and analyst in the Asian capital markets who started his career at a boutique hedge fund in Singapore where he was with the firm since 2002 and was also part of the core investment committee in significantly outperforming the index in the 10-year-plus-old flagship Asian fund. He was also the portfolio manager for Asia-Pacific equities at Korea’s largest mutual fund company. Prior to setting up the H.E.R.O. Innovators Fund, KB was the Chief Investment Officer & CEO of a Singapore Registered Fund Management Company (RFMC) where he is responsible for listed Asian equity investments. KB had taught accounting at the Singapore Management University (SMU) as a faculty member and also pioneered the 15-week course on Accounting Fraud in Asia as an official module at SMU. KB remains grateful and honored to be invited by Singapore’s financial regulator Monetary Authority of Singapore (MAS) to present to their top management team about implementing a world’s first fact-based forward-looking fraud detection framework to bring about benefits for the capital markets in Singapore and for the public and investment community. KB also served the community in sharing his insights in writing articles about value investing and corporate governance in the media that include Business Times, Straits Times, Jakarta Post, Manual of Ideas, Investopedia, TedXWallStreet. He had also presented in top investment, banking and finance conferences in America, Italy, Sydney, Cape Town, HK, China. He has trained CEOs, entrepreneurs, CFOs, management executives in business strategy & business model innovation in Singapore, HK and China.

2 Responses to China Wuhan Debt-to-GDP Ratio at 185.642

  1. Fan says:

    Isnt Wuhan’s GDP over RMB 900 Billion and not the reported RMB 105 Billion?

  2. Fan says:

    USD 105 billion seems more appropriate

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