Institutional Framework Assessment: China Tier-Three Governments Could Stay With Imbalanced Fiscal Positions For Longer - S&P Global Ratings’ Credit Research

Institutional Framework Assessment: China Tier-Three Governments Could Stay With Imbalanced Fiscal Positions For Longer

Institutional Framework Assessment: China Tier-Three Governments Could Stay With Imbalanced Fiscal Positions For Longer - S&P Global Ratings’ Credit Research
Institutional Framework Assessment: China Tier-Three Governments Could Stay With Imbalanced Fiscal Positions For Longer
Published May 22, 2025
Published May 22, 2025
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Abstract:

However, the support that tier-three LRGs are able to get from the respective tier-two LRGs is weaker than what upper-tier government can rely on. This is because fiscal resources generally decline down the fiscal ladder. The central government and tier-one LRGs also have mechanisms to provide exceptional support to tier-three LRGs. We estimate LRGs will be fiscally responsible for a shrinking part of LGFV debt going forward. This is as LGFVs transition toward being more commercial, and their hidden debts get progressively resolved. The weakest tier-three LRGs may continue to run unsustainable deficits and debt levels. We expect tier-three LRG deficits as a percentage of adjusted total revenue to stay elevated in 2025 before mildly recovering from 2026, to 10%-15%

  
Report Type:

Commentary

Sector
Global Issuers, Structured Finance
Format:
PDF Adobe Acrobat
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S&P Global Ratings’ Credit Research—S&P Global Ratings’ credit research provides analysis on issuers and debt obligations of corporations, states and municipalities, financial institutions, insurance companies and sovereign governments. S&P Global Ratings also offers insight into the credit risk of structured finance deals, providing an independent view of credit risk associated with a growing array of debt-securitized instruments.

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Cite this Report

  
MLA:
S&P Global Ratings’ Credit Research. "Institutional Framework Assessment: China Tier-Three Governments Could Stay With Imbalanced Fiscal Positions For Longer" May 22, 2025. Alacra Store. May 23, 2025. <http://www.alacrastore.com/s-and-p-credit-research/Institutional-Framework-Assessment-China-Tier-Three-Governments-Could-Stay-With-Imbalanced-Fiscal-Positions-For-Longer-3375397>
  
APA:
S&P Global Ratings’ Credit Research. (). Institutional Framework Assessment: China Tier-Three Governments Could Stay With Imbalanced Fiscal Positions For Longer May 22, 2025. New York, NY: Alacra Store. Retrieved May 23, 2025 from <http://www.alacrastore.com/s-and-p-credit-research/Institutional-Framework-Assessment-China-Tier-Three-Governments-Could-Stay-With-Imbalanced-Fiscal-Positions-For-Longer-3375397>
  
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