China Provincial Governments & SOEs: Hebei Province and Local SOEs
Mainland China’s 31 provincial-level regions have varied geographic and natural resource endowments, demographics, and economic structures. As China’s economic growth slows in recent years, regional economic disparity widens, driving an accelerated polarization of local governments’ fiscal strengths.
This series of reports provide a snapshot on each of the provincial-level local governments and provincial-level state-owned enterprises (SOE) which play crucial roles in economic development in their jurisdictions. We hope investors find these reports useful at a time when pressure on local government debt is increasing with the growth rates of fiscal revenue slowing down and SOEs’ credit divergence is widening.
Hebei Province and Local SOEs
Hebei is part of the Beijing-Tianjin-Hebei Coordinated Development Plan and its economy relies on asset-heavy secondary industries, such as steel and coal. The provincial SOEs leverage profiles improved amid a strong commodity cycle in 2021.
Read MoreZhejiang Province and Local SOEs
China’s coastal Zhejiang province is one of nation’s wealthiest regions with high disposable income per capita and low rural-urban income gap.
READ MOREShanxi Province and Local SOEs
Shanxi is one of China’s largest coal centres and its economy is highly dependent on coal. A booming coal market has helped its provincial coal SOEs to improve onshore funding access and deleverage since 2H21.
READ MOREHenan Province and Local SOEs
Henan has healthy government balance sheet but relies heavily on central government transfers, given the large population and agriculture, traditional manufacturing-focused economy.
READ MOREYunnan Province and Local SOEs
Yunnan is one of China’s poorest regions with low fiscal self-sufficiency and is highly reliant on central government transfers. The pressure on its provincial SOEs’ liquidity has eased since mid-2021, but credit risks among some SOEs remains.
Read MoreJiangsu Province and Local SOEs
Jiangsu is one of China’s wealthiest regions with a diversified industrial base. It has a large direct debt but a low debt/GDP ratio. Its provincial SOE issuers have a higher share of onshore bonds in the debt structure than other provinces’ peers.
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