China to scrutinize local gov't debt
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E-mail China.org.cn, June 28, 2012
China will tighten up management of local government debt and strictly regulate new borrowing to guard against fiscal risks, the minister of finance said on Wednesday.
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Xie Xuren [File photo] |
The nation will continue to clean up and regulate local government financing vehicles and bar them from incurring new debt, Xie Xuren said in a final report on the implementation of the 2011 budget to the ongoing session of the Standing Committee of the National People's Congress.
China has beefed up efforts to clear the massive debt of its local governments, which amounted to 10.7 trillion yuan (1.7 trillion U.S. dollars) at the end of 2010, amid its efforts to prevent default risks from destabilizing growth in the world's second-largest economy.
The Ministry of Finance announced Tuesday that local governments are prohibited from issuing bonds directly except as otherwise prescribed by laws or the State Council.
China will improve its local government debt management system, Xie said, while calling for a risk warning mechanism to protect against local debt defaults.
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