Nearly a Third of China Provinces Face Higher Local Debt Worries, Fitch Says
- Guizhou, Gansu face heavier refinance strains, among others
- Authorities remain ‘committed’ to supporting LGFVs: Fitch
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Local government financing vehicles in nearly a third of China’s provinces are more susceptible to debt-refinancing pressure given weakened fiscal conditions and higher borrowing costs, according to Fitch Ratings.
From Guizhou, one of China’s poorest provinces in the country’s south, to Heilongjiang, the northeasternmost province bordering Russia, local authorities in 10 regions may find it harder to support LGFVs given their own strained finances, the ratings firm said in a report. But Fitch still expect officials “to remain committed to containing systemic risk associated with the sector by proactively preventing widespread defaults in LGFV debt.”