A senior Chinese official has said that 2014 will be challenging year for local governments in the country with regard to debt repayment, People’s Daily reported Tuesday.
It cited vice minister of finance Wang Baoan as saying that 21.89 percent of the outstanding debts of local governments are due this year, the highest in several years. Meeting the repayment obligations will be a challenge, especially as fiscal income growth has slowed, he said.
Wang warned that resolving local debt issues is a complex task as many administrations have over-borrowed. It is estimated that as many as 154,000 government units, across provincial, city, county and village levels, have incurred debts via more than 30 types of loan instruments, making supervision more difficult.
Meanwhile, the finance ministry said it will commence sales of the first batch of local government bonds this year for Gansu, Xinjiang, Fujian, Guangxi and Sichuan. The sale will comprise 3-year and 5-year bonds, each worth 25.8 billion yuan, according to the report.
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