Since October, China has been using various fiscal policy instruments to counter the risks of hidden local government debt and promote economic growth
To maintain the impact of proactive fiscal policy, coordination of policies, allocation of funds and projects may be required.
Mitigate risk
The country has stepped up efforts to pay off existing hidden local government debts and curb new ones.
One of the initiatives is to implement a comprehensive debt resolution package that will allow local governments to issue special refinancing bonds and use the proceeds to repay hidden debts. As of mid-November, in the latest round, 28 provincial-level cities and regions had announced plans to issue special refinancing bonds worth a total of 1.25 trillion yuan ($176.3 billion).
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