- Summary
- Jobs needed for record number of graduates joining workforce
- Analysts fear hiring push could further strain regional finances
- Ballooning local government debt a key risk to growth
BEIJING/HONG KONG, March 30 (Reuters) - Some of China's most indebted local governments are on a hiring spree, a move that analysts say could put fragile regional finances under more strain as officials seek to create jobs for a record number of graduates entering the workforce this year.
China's huge and rising local government debt, totalling $9 trillion, or about half the nation's gross domestic product, is one of the biggest threats to fostering sustainable growth in the world's second largest economy.
Beijing has said defusing these debt risks is one of the government's major tasks this year, while it's also prioritising job creation in an economy still reeling from years of costly COVID-19 lockdowns, travel curbs and other containment measures.
In poorer areas, which are bleeding people and private business to urban centres, the task of providing jobs falls more squarely on local governments at a time they are struggling to raise revenue through income tax and state land sales.
"This type of strategy could be partly calculated to keep educated young people within the province, rather than seeing them leave for more developed regions," said Jack Yuan, vice president and senior analyst at Moody's.
However, "budgetary and debt pressures are more acute for these provinces, so increasing expenditure comes with additional fiscal risks," Yuan noted.
The provinces of Gansu and Yunnan as well as the region of Guangxi, are set to see the biggest percentage increase in hiring for civil servants in China this year, according to Offcn Education Technolo...
[Short citation of 8% of the original article]