China Central Bank Adviser Warns on Debt Chain Reaction
- Ma Jun urges steps to deal with hidden LGFV debt: Report
- LGFV from Inner Mongolia narrowly escapes default this month
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An adviser to China’s central bank urged authorities to take measures to prevent “systemic risks” from the failure of local government borrowing platforms, and warned of a “chain reaction” should defaults be allowed to damage market confidence.
Ma Jun, an external adviser to the People’s Bank of China monetary policy committee, said in an interview with Securities Times published Wednesday that the government could allow so-called local-government financing vehicles with strong fundamentals to take over weaker counterparts including those in other provinces.