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

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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