Moody's Investors Service says that statistics released on Chinese regional and local government (RLG) debt show a worsening of the RLGs' credit metrics, such as their debt-to-GDP and debt-to-revenue.Credit always looks good right before the credit cycle turns and it deteriorates until the economy recovers or defaults reduce debt levels.
On 29 August 2015, China's (Aa3 stable) National People's Congress released the State Council's update of debt statistics for RLGs. The update -- the first since the last release for figures as of June 2013 -- shows that in the 18 months between June 2013 and end-2014, RLG debt rose by more than one-third to RMB24 trillion ($3.7 trillion) from RMB17.9 trillion.
The RMB24 trillion was equivalent to 38% of the country's GDP in 2014.
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