China has the firepower to combat local government debt problems
Local governments are in danger of missing debt repayments, due to declining house prices, which could hurt the banking system, but China has the capacity to prevent defaults, believes Crédit Agricole.
The Chinese government will have to return to a strategy of fiscal easing this year to prevent local government debt problems - connected to falling real estate prices - destablising the country’s banking system, says Crédit Agricole.
Local governments rely “heavily” on land sale as a form of
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