Economics
China Seeks to Defuse Its $4.5 Trillion Local Hidden Debt Bomb
- Provinces seek funding from policy lender, building sales
- Off-book debt seen at 2.3 trillion yuan in ’19: Industrial Sec
This article is for subscribers only.
China’s multi-year campaign to contain financial risk is re-focusing on the so-called “hidden debt” owed by local governments, as officials seek to reduce repayment pressures amid falling tax revenues.
Provinces and cities from Jiangsu in the east to Qinghai in the west are looking for means to pay-off or restructure their implicit borrowings, a term which includes off-book funding via financing vehicles. Some authorities are seeking cheap refinancing from the nation’s largest policy lender, the China Development Bank, and others are selling off state-owned assets such as office buildings and housing.