As Risks Mount, China Tells Banks to Roll Over Local Government Debts

China is pushing state banks to extend local government debt amid growing concerns over economic instability. Local debt rose to 76% of the GDP in 2022, highlighting financial risks intensified by a property crisis and pandemic fallout. This move may challenge bank operations and inadvertently increase financial recklessness. The property sector’s decline and significant upcoming debt maturities further amplify these concerns.