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, Reuters quoted the newspaper report as saying.
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 (US$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 newspaper said.
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.
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