China’s Hidden Debt Problem Coming to a Head

Chinese flag
Chinese flag
(Farm Journal)

China is currently facing a significant and potentially dangerous issue related to its hidden debt problem, the Wall Street Journal reports. This problem has been building up for years as cities and provinces in the country engaged in extensive borrowing and spending without proper oversight. Key points:

  • Massive hidden debt: Various sources, including the International Monetary Fund (IMF) and Wall Street banks, estimate the total amount of off-balance-sheet government debt in China is somewhere between $7 trillion to $11 trillion. The exact figure remains uncertain due to the lack of transparency.
  • Unsustainability: Over the past year, it has become increasingly evident that the debt levels incurred by local governments in China are unsustainable. This means that these governments may struggle to meet their debt obligations.
  • High default risk: Economists have identified a significant portion of this hidden debt, with estimates ranging from $400 billion to over $800 billion, as particularly problematic and at a high risk of default. This poses a considerable threat to China’s financial stability.

Stay ahead of global trends impacting market prices with Pro Farmer's daily market insights. Learn more about Pro Farmer.

Tags

PRO FARMER
 

Latest News

Market Analysis
AgDay Markets Now: Darren Frye Says Grain Markets Post Higher Week but Will Need These Factors to Keep Rallying
AgDay Markets Now: Darren Frye Says Grain Markets Post Higher Week but Will Need These Factors to Keep Rallying

Darren Frye, Water Street Solutions, says the wheat rally came on weather and technical buying, which also helped corn and soybeans post a higher week. He's not sure it can continue without a bigger weather issue.

Michelle Rook
Market Analysis
Why Did Jerry Gulke Make Some Last-Minute Planting Changes on His Farm?
Why Did Jerry Gulke Make Some Last-Minute Planting Changes on His Farm?

Gulke Group president Jerry Gulke explains why he made the last-minute decision to switch 200 acres of corn to soybeans.

Michelle Rook
Pro Farmer Analysis
Wheat Outlook 5-30-90 Days (4.26.24))
Wheat Outlook 5-30-90 Days (4.26.24))

Recap of the week's price action, advice and outlook broken down into the next 5, 30 and 90 day segments.

Pro Farmer Editors
Market Analysis
Grains Close Higher for the Week: Does the Market Need to Rally and Add More Risk Premium or Not?
Grains Close Higher for the Week: Does the Market Need to Rally and Add More Risk Premium or Not?

Grains end mixed Friday but higher for the week led by wheat.  Cattle make new highs for the move helped by stronger cash.  Can the markets continue to move higher?  Darren Frye, Water Street Solutions, has the answers.

Michelle Rook
Beef
APHIS To Require Electronic Animal ID for Certain Cattle and Bison
APHIS To Require Electronic Animal ID for Certain Cattle and Bison

APHIS issued its final rule on animal ID that has been in place since 2013, switching from solely visual tags to tags that are both electronically and visually readable for certain classes of cattle moving interstate.

Greg Henderson
Taxes and Finance
A Margin Squeeze is Setting in Across Row-Crop Farms, and 80% of Ag Economists Are Now Concerned It'll Accelerate Consolidation
A Margin Squeeze is Setting in Across Row-Crop Farms, and 80% of Ag Economists Are Now Concerned It'll Accelerate Consolidation

There's an immense amount of pressure riding on this year’s crop production picture, and with a margin squeeze setting in across farms, economists think it could accelerate consolidation in the row-crop industry. 

Tyne Morgan
View More