According to 2022 data from the International Monetary Fund, China's local government debt had already reached 92 trillion RMB, accounting for 76% of GDP. Economic expert Dr. Cheng Xiaonong wrote in Radio Free Asia on February 27, 2023, that the total debt of China's central and local governments is as high as 110 trillion RMB, equivalent to 91% of GDP, far exceeding the internationally recognized warning line of 60%. Dr. Cheng believes that local governments in China are "unlikely to repay their debts." He warned that if the massive debt problem is not resolved, China will face a comprehensive and extremely severe economic disaster.
Thus, both of China's major investment fields—real estate and infrastructure—are in decline.
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