Local government financing vehicles sell bonds that help provincial authorities raise money, including for infrastructure projects. Photo: AFP
Local government financing vehicles sell bonds that help provincial authorities raise money, including for infrastructure projects. Photo: AFP

China’s hidden debt: ‘corruption problem’ at local levels threatens political, economic stability

  • Debt issued by local government financing vehicles (LGFVs) is kept off the balance sheets and thus more susceptible to corruption than relatively transparent government bonds
  • But analysts say LGFVs are poised to play bigger role next year in filling local government funding gaps, despite risks to national economy

Topic |   China's economic recovery
Local government financing vehicles sell bonds that help provincial authorities raise money, including for infrastructure projects. Photo: AFP
Local government financing vehicles sell bonds that help provincial authorities raise money, including for infrastructure projects. Photo: AFP
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