China’s 1 trillion yuan muni issues show yet to kick debt habit

SHANGHAI (May 19): Global banks are redoing the math on the apparent slowdown in Chinese borrowing in April to include 1 trillion yuan ($211 billion) of regional government notes. The conclusion: the debt binge is far from over.

Including record municipal bond sales, total social financing jumped 17% from a year earlier, the most since 2014, to 1.76 trillion yuan, UBS Group AG estimates. Growth in adjusted total credit quickened to 17.7% from 17.1% in March, according to Deutsche Bank AG. The official reading, which excludes borrowing by local governments, came out on Friday and showed a 29% slide to 751 billion yuan.

The People’s Bank of China was so alarmed by the impression it was less supportive of growth that it highlighted financing by provinces and cities over the weekend. BlackRock Inc’s Laurence D. Fink, who oversees the world’s largest money manager, is among investors who would rather China grows slower and cuts total debt that was 247% of gross domestic product last year, up from 164% in 2008.

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