China's local government bonds have exceeded 40 trillion yuan, and urban investment bonds have exceeded 60 trillion yuan
China's local government bonds have exceeded 40 billion yuan, and urban investment bonds have exceeded 60 billion yuan.
At the end of 2023, the scale of China's local ** debt will reach a new high, of which China's local ** debt at all levels will increase by 9,325.4 billion yuan, a year-on-year increase of 26%, and the total balance will exceed 40 trillion yuan, reaching an astonishing 4070,000 yuan, municipal bonds also continued to set a new record, the total balance exceeded 600,000 yuan, friends who know the basics of economics know that debt will not disappear! The debt will only be transferred, and in the end, who will bear the debt of more than 100 billion euros, and how can we avoid this being the debtor?
First of all, since urban investment bonds are essentially composed of urban investment companies led by local governments at all levels, in order to facilitate understanding, we will refer to the more than 40 billion local bonds and more than 60 billion urban investment bonds as local bonds. The more than 100 billion local bonds can be divided into three categories: general local bonds, special local bonds, and urban investment platform financing bonds. General local government bonds are mainly used for non-specific public expenditure purposes, such as urban road repair, sewage treatment, police centers, urban greening, etc., and the characteristics of this type of debt are that there is no fixed purpose, there is a demand for use, and most of them have no income! This type of debt is characterized by having no fixed purpose, **needing**, and most of it has no income.
Local special debt is mainly used for projects with specific economic benefits, such as urban subway construction, highway construction, toll parking lot construction, etc., which is in line with the nature of special funds to a certain extent; The debt financing of the urban investment platform is mainly by revitalizing state-owned assets in various places, using these assets to issue loans, and then leading related projects by **, from a formal point of view, urban investment bonds are more like a corporate behavior, and the loans are mainly bank loans, and a small part is composed of derivative loans such as trusts.
Secondly, the scale of local debt is constantly moving towards a new high, the main reason is that China's industrial transformation is still unsuccessful, since the implementation of the reform in 1981, the main income of local governments at all levels began to rely more and more on land, at the peak of housing prices, some places have more than 7 layers of income from land, and the most important asset in the hands is land! Therefore, when the real estate industry is not good, local governments at all levels can only rely on land and other state-owned assets to continue to obtain funds, which in turn leads to an increase in debt.
But the problem now is that although land can be financed, if the land does not generate funds continuously, then repayment and follow-up interest will become an unsolvable problem, and may even lead to the financial bankruptcy of some local governments, in order to avoid this situation, many banks have carried out extravagant redemptions on local debts, such as Guizhou, some local municipal bonds can be rolled over for 20 years above repayment, and the interest rate is much lower than before, The principle of this is to gradually dilute the existing debt with monetary over-issuance, and we are doing the same, as of the end of 2023, China's broad money M2 balance exceeded 297 trillion, and if nothing else, it is very likely to break through the 300 trillion yuan mark in 2024.
Finally, among the many ways to solve debts, rolling debt is only a symptomatic measure, which can only ensure that the debt is not mine temporarily, but the debt has not really disappeared, if you want to completely alleviate this debt crisis, someone must bear these debts, who will become the recipient of these debts, the answer is obvious, of course, we ordinary people, especially some friends who have deposits in the bank and cannot tolerate the low interest rates of the bank.
So how to avoid becoming a victim of junk local municipal bonds, then here we need to understand what these debts will be packaged into for everyone to bear, according to the experience of foreign developed countries, these debts are usually packaged into the best financial products, or included in the assets of listed state-owned enterprises, these packaged financial products can never be bought, if the income is reasonable, and the underlying assets are the Yangtze River Delta, the Pearl River Delta and other economic high-quality areas of the relevant underlying debt assets, then you can rest assured to buy, However, if it is the underlying assets in some remote and backward areas, then it is resolutely not allowed to invest. The Pearl River Delta and other high-quality economic areas of the relevant underlying creditor's rights assets, you can rest assured**, but if it is the underlying assets in some remote and backward areas, you can resolutely not invest, after all, this kind of investment is neither guaranteed nor income, it all depends on your personal judgment of your own profit and loss.