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China’s $1.7 trillion hangover

China’s $1.7 trillion hangover

Up to 40% of China’s $1.7 trillion LGFV loans are at high risk of default. What’s a panicking Beijing to do?

June 1998

Shrugging off the stereotypes


The military dictatorships are gone and the civil wars are over. Now, as Central America's governments overcome their suspicion of foreign borrowing, the region is opening up to foreign investment. James Rutter reports.


Home-grown banks fill a gap

Sound fundamentals: economic indicators for Central America

(1996)

Area (1,000 km2) 

Population (m) 

GDP ($bn)  

GDP per capita ($)

Forex reserves ($m) 

External  debt ($bn)

Costa Rica

51

3.5

9.1

2,600

1,036

4.0

El Salvador

21

5.9

10.6

1,800

993

2.8

Guatemala

109

10.9

17.9

1,480

1,010

3.4

Honduras

112

6.1

4.0

650

445

4.6

Nicaragua

139

4.7

2.0

440

337

6.0

Panama

77

2.7

8.2

3,000

1,327

7.1

Source: Dresdner Bank Lateinamerika
There aren't many emerging-market regions where the undeveloped state of the local equity market is partly blamed on kidnapping. In Central America, though, companies take the idea of protecting staff from headhunters rather more literally than usual.

Luis Ernesto Rodriguez,...


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