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China finds $84bn local government debt irregularities

National Audit Office said breaches included “irregular credit guarantees”, “irregular collateral” and “fraudulent and underpayment of registered capital”.

There are growing concerns about the amount of bad loans being held by local governments.Official figures show they held debt of 10.7tn yuan ($1.7tn; £1.1tn) in 2010.

“The State Council is studying proposals to enhance local government debt management and to address fiscal and financial risks,” the audit office said in the report.
‘Again and again’
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A lot of the local debt will be absorbed by the central government”
Michael Pettis Peking University

Local governments have been borrowing money from Chinese banks to fund projects aimed at maintaining economic growth.

According to the China Banking Regulatory Commission, local governments took up 80% of total bank lending in China at the end of 2010.

However, analysts said that although the lending had helped to spur investment and boost growth, it was now weighing on local governments.

“Whenever you look at lending that spurs growth miracles, it starts off with an increasing ability to pay the debt,” Professor Michael Pettis of Peking University told the BBC.

“But in every case that ability fades. That is the process that is happening in China,” he explained. “We are going to see stories like this again and again.”
Easing burden?

In October last year, China allowed four local governments to sell bonds for the first time in 17 year. It was hoped the sale would help them pay their loans.

However, the central government put a limit on the amount of bonds the local governments could issue despite the fact that there was a lot of interest among investors.

According to the Xinhua news agency, Shanghai’s bond sale received bids for three times the amount of bonds on offer.

As a result, many of the local governments still have sizeable debts and while the central government may let them raise money, it may also have to take further measures to solve the problem, analysts said.

“A lot of the local debt will be absorbed by the central government,” said Mr Pettis of Peking University.

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Thousands seek that special someone in Shanghai

SHANGHAI: The odds favored the men as thousands gathered to look for love in Shanghai at the eastern Chinese city’s largest-ever matchmaking party, paying for the privilege of searching for their other half.

Census data shows a rise in the percentage of older single women over the last decade, while the percentage of older single men has fallen, according to the China Daily — which experts said might be due to increasingly choosy women unwilling to settle for men with inferior education and living standards.

Organizers said there were three women for every two men, with 6,000 tickets sold to single woman and 4,000 to men.

“These days, girls are much more self-sufficient and independent,” said Zhou Juemin, president of the Shanghai Matchmaking Association, which organized the two-day event at the weekend.

“Also, there’s a lot of work pressure in society nowadays, so many girls are busy with their jobs and perhaps tend to consider career advancement above marriage — so some of them are no longer young.”

Long queues of singles waited for their turn for five-minute chats with the opposite sex in the ultimate blind-date event.

“If your standard of living is lower than mine in every aspect, but if we can relate well to each other, I wouldn’t mind — because if we relate well, there would be good chemistry,” said 27-year-old Zue Tianwei.

“Then the issues of social order would no longer be a problem. I guess it depends on how strong my feelings are.”

Many men, for their part, said they were willing to shrug off traditional thinking that once made marrying a woman of higher educational and living standards unacceptable.

“Regarding girls who have a higher education level or standard of living, I wouldn’t mind pursuing them because this is a two-way thing,” said Li Jianxun, a 27-year-old native of central China who has lived in Shanghai for two years.

“As long as the feelings are mutual, it is still possible to interact and get to know each other.”

Hopefuls from nearby provinces travelled to Shanghai to take part, among them some who had already married and divorced.

A few, bolder than others, held up signs to distinguish themselves from the crowd. One said, “I wanted to fall in love early, but it’s already late.”

Around 3,000 parents also tagged along, with Organizers allocating a special corner for them to advertise information on their unmarried children. Some kept an eye out for suitable future in-laws.

Qi Xiong, who helped his son by taking pictures to keep track of potential matches, said he still felt that men should not look for wives with higher social status than themselves.

“Generally speaking, if you are a girl and your education level or income is too high, we’re more likely to oppose it,” he said, noting that a simple university degree was sufficient.

“A huge difference in education levels would make it difficult to communicate. If both parties begin at the same starting line, and want to achieve success in the future, they can work at it together.”