Hainan province downplays debt problems as its capital city asks for help
Province's deputy governor says he is confident of repayments 'at all government levels', even as Haikou says its obligations are 'impossible'
Officials in Hainan province have downplayed concerns over local government debt despite a plea for help by its capital city Haikou, which said it might be unable to meet its repayments.
"I am confident about debt repayment at all government levels in Hainan," Mao Chaofeng, the province's deputy governor, told the Bloomberg news agency on the sidelines of the Boao Forum for Asia on Friday. "I don't think there will be a risk," he said.
In an address to the same forum, Finance Minister Lou Jiwei insisted that local governments would not face bankruptcy as they had "a lot of assets". "[Local governments] have their own methods to handle [debt], I think they can solve the problems before going bankrupt," Lou said.
The ministry was responsible for monitoring debt risks and had stepped up efforts to manage them, Lou said, but the central government had no plans to bail out local governments.
The comments were in stark contrast to a letter drafted by Haikou's political advisers warning of its debt problems.
"It's impossible to pay the debts with our own financial resources," the advisers wrote, calling for help from the provincial government.
Haikou's problem was so severe that it was included two years in a row on a finance ministry list of cities at risk of being unable to meet their debt repayments, the letter said.