Fitch Ratings downgraded China’s long-term rating for renminbi-denominated debt from “A+” to “AA-” due to concerns over the lack of transparency as lending to local governments rises, Bloomberg reported. Fitch estimates the total amount of credit in China’s economy, including shadow banking, may have hit nearly 200% of GDP by the end of 2012 – an increase from 125% at the end of 2008. According to estimates by former Finance Minister Xiang Huaicheng, local governments in China may have more than US$3.2 trillion (RMB20 trillion) of debt, double the amount reported in 2011 by the National Audit Office.
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