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在线翻译:
szdaily -> Business
China to contain local govt. debt risk
    2017-July-31  08:53    Shenzhen Daily

CHINA will resolutely curb the rise in hidden local government debt via “disguised channels,” although risks posed by the overall government debt load are generally under control, finance ministry officials said Friday.

In recent years, the government has tightened controls on new local government debt to help ward off risks following a borrowing binge since the global financial crisis.

Local governments will be prevented from obtaining “disguised financing” via local government financing vehicles (LGFVs), Wang Kebing, deputy director general of the ministry’s budget department, told a news conference.

Authorities will also prevent local governments from using the public-private partnership (PPP), government investment funds and government procurement services as “disguised channels” for raising debt, Wang said.

Local governments can only issue bonds within the annual quota set by the parliament, although their “reasonable” financing demand will be met, Wang added.

LGFVs will be transformed into State-owned companies responsible for their own profits and losses, Wang said, reaffirming a ban on local governments providing guarantees for debt issued by such vehicles.

Authorities must strictly regulate local government debt-raising activities and halt illegal debt guarantees, the State Council, China’s Cabinet, said after a regular meeting.

Resolving local debt risks was important to ensure China’s economic and fiscal sustainability and financial safety, the Cabinet said.

Chinese Vice Finance Minister Liu Wei told the same news conference that risks posed by local and central government debt combined were generally under control. Overall government debt was equivalent to 36.7 percent of gross domestic product in 2016, which was lower than that of major economies and most emerging market economies, he said. (SD-Agencies)

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