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Risk/return tradeoff: investors compensating for holding risky local Chinese debt

Summary:
The gap between rates on Chinese national borrowing (16% debt/income ratio) and local borrowing (150% debt to income ratio) is getting bigger as investors demand a higher return for holding the riskier debt. (Source:  WSJ.)

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The gap between rates on Chinese national borrowing (16% debt/income ratio) and local borrowing (150% debt to income ratio) is getting bigger as investors demand a higher return for holding the riskier debt. (Source:  WSJ.)
Risk/return tradeoff:  investors compensating for holding risky local Chinese debt

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