China tightens rules on insurers to fight local govt. debt risk

BEIJING (Reuters) – Chinese authorities on Thursday tightened rules on insurers providing financing to local governments, as Beijing intensifies its crackdown on illicit local government borrowing practices.

The changes were the latest in a series of measures taken by Beijing in recent months to rein in local government debt, with policymakers increasingly wary of financial risks in the world’s second-largest economy.

A notice from the insurance regulator, the China Insurance Regulatory Commission (CIRC) and the Ministry of Finance said insurers were banned from offering illegal financing services for local governments or local government financing vehicles.

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