The general idea is that Guizhou is currently deeply mired in a debt crisis, has been confirmed to be unable to save itself, and hopes to receive intellectual support from higher-level departments to help them think of ways.
It is rare for the government to publicly issue a document for help, which shows that the problem is indeed imminent and has reached the point where it must be solved.
Current Debt Status and Debt Resolution Progress in Guizhou Province
Recently, local government work reports and budget reports have come one after another, and at the same time, high-level documents from the provincial government have also begun to circulate. First, let’s take a look at the debt data of all provinces in the country in 2022:
It can be seen that Guizhou Province’s total debt in 2022 was 1247.01 billion yuan, with a gross domestic product (GDP) of 2016.46 billion yuan, and a debt ratio as high as 61.89%, ranking second to last in the country.
But this is only last year’s data. What about the debt problem in Guizhou after a year?
Next, let’s take a look at the descriptions of the debt resolution results of each province obtained from the 2023 government work reports and budget final accounts reports. We can see that the result description of Guizhou Province is:
It has maintained the bottom line of not causing regional financial risks.
Just from the two words “bottom line”, we can see a glimpse: only maintaining the bottom line shows that the debt problem is still severe, and it also shows that Guizhou is on the verge of collapse.
Why not privately apply for assistance from higher authorities, but instead publicly issue a document for help?
To understand this problem, we must first clarify the attitude of the central government towards local government debt in our country’s financial system.
Preventing and resolving the risks of local government debt has always been a focus of market attention. Among them, resolving hidden debt is the top priority. The Ministry of Finance has repeatedly stated: Steadily resolve the stock of hidden debt, adhere to the principle that the central government does not provide assistance, and “whoever’s child, let them hold”. Establish a market-oriented and rule-of-law debt default disposal mechanism, steadily resolve the stock of hidden debt, and reasonably share risks between debtors and creditors in accordance with the law.
The so-called hidden debt refers to the debt borrowed by local governments outside the legal government debt limit, directly or by promising to repay with fiscal funds, and by providing illegal guarantees, etc., and the borrowing entity is often the local government financing platform company (that is, the “city investment” in various places).
And the main reason for the rapid growth of local government hidden debt is that local officials have over-borrowed to seek political achievements.
Having said that, I believe everyone basically understands what’s going on.
(The above views are only personal speculation and do not represent the truth)
The current predicament is a huge challenge for Guizhou, but it is undeniable that Guizhou has also achieved many remarkable achievements in recent years. Here, I wish Guizhou to successfully get out of the predicament as soon as possible, grow stronger, and create brilliance again.
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