China faces ‘big’ debt risks in drive to narrow urban-rural gap, Beijing forum told
China must guard against debt risk in rural areas as it pushes to revitalise the countryside and narrow the urban-rural gap, Chinese officials and academics have warned.
Addressing the Tsinghua PBCSF Global Finance Forum, they said China’s campaign to push rural funding and infrastructure could give rise to big financial risks – given the inefficient agricultural sector, lack of loan collateral options, and rural residents’ preference to work in cities.
“There is quite big uncertainty [in the rural revival drive] from the perspective of investment and financing,” Zhou Mingshan, a finance professor and deputy president of the Zhongnan University of Economics and Law, told the forum in Beijing on Saturday.
A weak agricultural sector made investment risky, while rural residents – who are mostly low-income – were not good at using financial tools, Zhou noted.
The biggest gap in rural investment related to infrastructure, which often featured high costs but low benefits, he added.
Wang Yan, deputy head of the Ministry of Agriculture and Rural Affairs’ budget and finance department, highlighted the lack of security options for loans in rural regions due to an undeveloped property rights exchange market.
“One problem that has emerged during the development of rural financing is that farmers think the threshold is too high, while financial institutions find there is too much risk,” Wang said.
The central government has pledged more financial support for rural areas in recent years as President Xi Jinping pushes for rejuvenation of China’s vast rural regions in pursuit of “common prosperity”.
The balance of loans relating to agriculture and rural development totalled 49.25 trillion yuan (US$7.03 trillion) last year, up by 14 per cent from 2021, according to data from China’s central bank.
But there have been growing concerns over risks, as excessive debt becomes one of the biggest challenges for the world’s second largest economy.
Debt raised by local government financing vehicles had soared to 66 trillion yuan, or about half of China’s annual gross domestic product, an International Monetary Fund report said in February. This was nearly double the figure in 2018, which stood at 35 trillion yuan.
According to Dang Guoying, a former researcher at the Institute of Rural Development under the Chinese Academy of Social Sciences, more than private investment in rural areas, the real concern was money spent on public services.
“There are many examples of individuals losing money after investing in rural areas or agricultural projects, but they are not so harmful as it is a small amount compared to the total rural investment,” he said in a telephone interview.
“What is alarming is that we have been spending a huge amount of money on public infrastructure in the countryside but the government never evaluates risks. There are just no people to use these facilities – all have left for urban areas to seek better-paid jobs.
“So it’s a big waste and means a big financial burden for the government.”
Villages across China have faced a rising debt burden in recent years, as they have sought to improve infrastructure and public spaces, the China Democratic League, one of the country’s eight legally recognised minor political parties, said in its report to the national legislative sessions in March.
In central Hunan province, for example, over 70 per cent of village committees were in debt in 2020, with the average amount of debt standing at 1.08 million yuan, the report said.
Shows
See AllAM Live
AM Live is NTV's morning current affairs show that sets the agenda for the day with insightful panels every weekday.
Business Redefined
Business Redefined is Kenya’s premier thought leadership platform for unpacking matters regarding economic and finance policy as well demystifying complex developments in the region’s capital markets.
Comedies
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Documentaries
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Entertainment
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Full Episodes
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Gumzo La Sato
Gumzo La Sato is a live social issues show that aims to create awareness about issues affecting the larger society. The discussions range from Parenting, Marital bliss and struggles, Oppression, violence, and all matters of the Heart.
Health Diary
Health Diary is a weekly show that highlights different types of diseases/conditions and seeks ways to prevent, treat/manage them. The show debunks this through real life stories and also feature specialists in different fields, to offer medical advice on the same.
Letter To My Younger Self
Letter To My Younger Self is a podcast where guests get to write a letter to their younger self, from which Maxine formulates questions to ask them during the hour-long show.
Nation Reports
Nation Reports is a weekly podcast offers an opportunity for listeners to interact with various reporters and journey with them as they unravel the biggest most emotive stories.
One Health Lens Podcast
Discussing health matters and human stories from Kenya and across Africa. We talk big picture from people to policy, ecosystems, and everything in between. Follow us on LinkedIn: https://www.linkedin.com/company/onehealthlens
Paradise Lost
Paradise Lost peeks through the story of Louis Otieno, the times, and everything in between.
Primetime
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Speaking of GEN Z
Speaking of Gen Z brings you entertaining but meaningful conversations about a generation that is trying to navigate through adulthood. Join hosts Michelle, Jackie and Esther as they unravel all things Gen Z.
Sport On
Sport-On is a 30-minute sports magazine show on NTV and 3 hours on NATION FM. The show seeks to give the sports “fanatics” and “funatics” comprehensive and in-depth coverage of sports both locally and internationally.
Tech-over
The extent of technological growth is beyond mere acknowledgment; it has seamlessly integrated into our daily existence. A few years ago, the notion of paying electricity bills through mobile money or recharging with 'tokens' in Kenya seemed inconceivable. Online product sales were considered distant, and artificial intelligence is rapidly reshaping various facets of our lives. Amidst these technological leaps, those with a solid understanding of tech can navigate challenges, seize opportunities, and build a sustainable livelihood. Tech over Show aims to be the platform facilitating discussions among thought leaders, innovators, tech companies, and the government, addressing challenges and opportunities in Kenya's thriving tech industry.
Thamani
Thamani is a business show which is dedicated to emerging issues regarding micro, small and medium size businesses.
The Politalk podcast
This is The Politalk podcast. Here we look into the ins and outs of everything Kenyan politics. We pull no punches and have no reason to sugarcoat anything that matters to Kenyans.
The Trend
A two-hour-long live show that airs on Fridays. The show focuses on what is current in the entertainment industry, controversial and popular across all media platforms targeting those aged between 25 and 35 years.
The trend podcast
The trend podcast highlights and captures the best of banter from #TTTT segment that airs every Friday on NTV. It's the TTTT EXTRA
The Wicked Edition
The Wicked Edition with Dr. King’ori seeks to address serious issues through humour and relatable wit. It is a two-part half hour show filmed in front of a live audience
Trending
A collection of our premium content. Diam curabitur vehicula A collection of our premium content. Diam curabitur vehicula
Twende
Twende is a travel show that highlights beautiful, unique, diverse locations, people, and cultures. The show offers fresh perspectives on familiar locations and memorable experiences in new ones.
Unscripted
This Saturday evening lifestyle show lets viewers share their stories and life experiences as openly & honestly for the purpose of shifting the culture of silence.
VIP Access
VIP ACCESS is Anyiko Owoko’s YouTube and podcast show on Music and Culture dedicated to promoting Africa’s most promising talent and creatives. This podcast grants you VIP access into timeless interviews while providing a platform for rising as well as established artists across the continent. Since launching in 2018, Anyiko has interviewed over 70 African music stars.
WADR
This weekly news show aims to have all sides of debate but not be constrained by it, listen to main voices in the contest but not allow them to hold the viewers hostage, entertain debate but allow push back with all due respect.
When death do us part
In this podcast, three widowers openly speak about the process of grief, how they found themselves exposed to the emotional turmoil of losing their wives, and how society still does not know how to deal with them.
Your World
Your World is a health, wellness and variety show. It provides a platform for audiences and experts to share their experiences on how to improve or manage health issues, across Kenya and the Africa region.