China to Shift $139 Billion of ‘Hidden’ Local Debt to Provinces
- Program marks step to address threats to financial stability
- Allowance has been set for each region: person familiar
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China will allow provincial-level governments to raise about 1 trillion yuan ($139 billion) via bond sales to repay the debt of local-government financing vehicles and other off-balance sheet issuers, a small step toward addressing one of the biggest threats to the nation’s economy and financial stability.
The Ministry of Finance has informed relevant authorities about the “refinancing bonds” program, people with knowledge of the matter said, asking not to be identified as they aren’t authorized to discuss the program. The quota has been set for each region, one of the people said, without providing further details on sizing.