China has made preliminary arrangements for addressing local government debt risks in second half of the year, Chinese newspaper The 21st Century Business Herald reported.
The government held a briefing in which it was made clear that the room under the debt limit will be used to resolve local government risks, but didn’t specifying amount and details, the report said, citing a person in charge of the debt department of a provincial finance department.
As of the end of last year, China’s outstanding local government debt stood at about 35.07 trillion yuan, within the limit of 37.65 trillion yuan approved by the National People’s Congress (NPC). That leaves 2.58 trillion yuan quota unused.
Bloomberg has reported earlier this week that provincial governments will be allowed to raise about 1 trillion yuan through bond issuance to repay municipal bonds and other off-balance-sheet debts.
