China kicks off US$137bil plan to tackle LGFV debt

The programme is being closely watched because debt servicing costs are increasingly limiting local governments’ ability to deliver fiscal support to the economy, dragging on China’s growth. — Reuters

Beijing: China has begun a programme to allow local governments to swap so-called “hidden” debt for bonds carrying lower interest costs, as it seeks to defuse risks from US$9bil of off-balance sheet borrowing.

The Inner Mongolia region will issue three “refinancing” bonds worth 66.3bil yuan, with maturities between three and seven years, the Shanghai Securities News reported, citing an official document.