China has stepped up its debt reduction campaign after borrowing for infrastructure and other public projects ballooned after the coronavirus pandemic. Photo: Xinhua
China has stepped up its debt reduction campaign after borrowing for infrastructure and other public projects ballooned after the coronavirus pandemic. Photo: Xinhua

China’s debt clamp down stokes risk of first local government credit defaults

  • Beijing signalled last month it may allow local government financing vehicles (LGFVs) to default or undergo restructuring if they are unable to repay debt
  • Since then, there have been signs that some LGFVs have been slowing the issuance of new debt because of tougher requirements from stock exchanges

Topic |   China economy
China has stepped up its debt reduction campaign after borrowing for infrastructure and other public projects ballooned after the coronavirus pandemic. Photo: Xinhua
China has stepped up its debt reduction campaign after borrowing for infrastructure and other public projects ballooned after the coronavirus pandemic. Photo: Xinhua
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