Economists warn against lending to nation's less-developed provinces

Bloomberg economists are warning banks and finance organizations against lending to customers from less-developed provinces in China as they carry higher risks of debt default.

Seeking to "single out the slow antelopes from the faster ones", Fielding Chen and Tom Orlik said their research had found that northeastern Liaoning, southwestern Yunnan and northwestern Gansu provinces ranked the top three in default risk.

To measure the relative risks, the two economists cited a number of indicators, including "cyclical" measures such as GDP growth, producer price indexes, local fiscal revenue growth, home prices, and "structural" measures such as demographic change, reliance on land sale revenue, and debt to GDP ratios.