China vows to press on with curbs on local government debt
China will continue to focus on reducing risks from local government debt next year, the finance ministry said.
The Ministry of Finance will crack down on illegal financing guarantees and also curb activities designed to “disguise” new loans as government investment funds or public private partnerships, it said in a notice on its website late on Thursday.
Following a work meeting, the ministry also said it would work to ensure that financial resources are allocated optimally in order to promote supply-side reforms, alleviate poverty, curb pollution and provide support to major government programmes like the Belt and Road international trade initiative.
Alarmed by rising local government debt levels, China’s authorities have stepped up reduce leveraging and cracked down on reckless borrowing. The finance ministry has also punished local officials for providing illegal debt financing guarantees.
But a central bank official said earlier this week that local governments should be allowed to take more responsibility when it comes to raising finances and handling debt.