Beijing to act against ‘hidden’ local debt: China Daily

SHANGHAI (Reuters) – China has drawn up new guidelines on measuring and controlling “hidden” local government debt, the official China Daily said on Tuesday, citing senior government sources.

The new policy document calls on local governments to find out how much off-budget debt has been accumulated over the last three years and to draw up risk control plans, the newspaper said.

Off-budget debt is raised through non-bond channels and is also outside the annual debt quota approved by the central government.

China vowed last week to keep debt levels under control even as it rolls out new economic stimulus measures to offset the impact of trade frictions with the United States.

The last round of inspections ended in 2014 and uncovered 15.7 trillion yuan ($2.28 trillion) in total outstanding local government debt, China Daily said.

Local governments were ordered to swap the debt by issuing bonds, of which 10.9 trillion yuan had been swapped, the paper noted.

Total outstanding local government debt was 16.63 trillion yuan by the end of May, according to the latest figures from the Ministry of Finance.

The struggling rustbelt province of Liaoning in northeast China has already established a parliamentary committee to scrutinize government spending and control debt.

Total debt in the province, which has sought to use infrastructure investment to reverse its long-term economic decline, stood at 845.5 billion yuan by the end of 2017, 168.8 billion yuan higher than originally calculated.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.