23 July 2019

Municipal bonds eyed to clean up local debt, paper says

China may decide next month to expand a trial program that allows local governments to sell bonds amid concern their huge borrowings are largely hidden from view and pose a risk to the stability of the financial system, China Daily reported Monday. A government think tank that advises China’s cabinet is proposing greater use of municipal bonds ahead of a policy-making meeting next month to decide Beijing’s long-term reform agenda, the report said. Local government debt is estimated at U$4 trillion, 42 percent of gross domestic product, but much of it has been raised via financing vehicles that do not disclose details about the size and health of the loans, the report said.

– Contact HKEJ at [email protected]


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