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Foreign hedge funds are going to buy China's local government [Copy link] 中文

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Post time 2011-7-6 12:17:34 |Display all floors
Foreign hedge funds are going to help China's local government free of debts crisis by buying the assets of China's local government
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Post time 2011-7-6 12:32:43 |Display all floors
In 2011, the total left assets < the total debts for 78 local municipal government.

In 2011, 40 local municipal governments have to get new bank loans to pay back old bank loans.

In 2011, the debts owned by China's provincial governments + region governments + country-town governments are more than the financial revenue of China's Central government + all of local government.
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Post time 2011-7-6 12:39:42 |Display all floors
What's the major sources for a local government to pay back the debts in the past?

1. Fee and Taxes are already less than government's spending.
2. Privatization of government-own assets.

In the late 1990s, China's government got a lot of financial revenue from the privatization of local government-own companies.
Now most of local country-town municipal government-own companies were already sold out.

From the late 1990s, China's government got a lot of financial revenue from the privatization of Central government-own companies in stock market and privatization of land.
But the revenue belong to Central government, though government can still go on selling these  companies..

In the early 2000s, most of government-own apartments were already sold out.

In 2000s, land were nearly sold out in urban area of many local municipal government. (70-year-rental) However, the prices of remaining land in many cities are not rising as fast as the land price in Beijing and Shanghai.

[ Last edited by 468259058 at 2011-7-6 12:53 PM ]
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Post time 2011-7-6 12:47:49 |Display all floors
How can China's local government pay back more and more debts?

Fee + Tax collected by government is already a little high.
For example: Now a lot of Chinese began to complain the transport Fee is too high. It is already the highest one among Human being's societies on this earth.

2. Central government can go on printing more money to pay back those debts. But too much paper money have already been printed to pay back those bad debts in the past20 years. Now inflation is already a headache for China's Central government.
But Central government had to start discussing how to let Central government pay back those debts for local government from 2011-04.

China's local government still have a few of government-own assets. Such as the glorious and luxurious government building and government-own infrastructures - government-own bridges, government-own roads, government-own pipelines....



Would China's local government sell their glorious and luxurious government building first or government-own infrastructure first?

Of course. China's local government would first private government-own bridges, government-own roads. Local government would sell those government-own infrastructure to foreign-own and private-own funds first.

In mid June, 2011, a fund as much as $0.729 trillion was financed by one Australian Bank, Macquarie, and one China's company. This fund is waiting to buy local government-own infrastructure.
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Post time 2011-7-6 12:54:15 |Display all floors

Reply #1 468259058's post

You must be joking!

cheerios!

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Post time 2011-7-6 13:06:15 |Display all floors
Originally posted by 468259058 at 2011-7-6 12:47
In mid June, 2011, a fund as much as $0.729 trillion was financed by one Australian Bank, Macquarie, and one China's company. This fund is waiting to buy local government-own infrastructure.



2011-06-15
Financial Times of U.K. in Chinese language
h ttp://w ww.ftchinese.com/story/001039108

in English langauge
h ttp://w ww.ft.com/cms/s/0/474dd608-9678-11e0-afc5-00144feab49a.html#axzz1RIZIc1kN


A brief news report in Chinadaily
Macquarie, Everbright say China infrastructure fund hits $729m
(Agencies)
Updated: 2011-06-14 16:45
h ttp://w ww.chinadaily.com.cn/bizchina/2011-06/14/content_12695403.htm
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