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China should improve local government debt risk controls: Official

China should improve local government debt risk controls: Official

FILE PHOTO: A security surveillance camera overlooking a street is pictured next to a nearby fluttering flag of China in Beijing, China November 25, 2021. REUTERS/Carlos Garcia Rawlins

BEIJING: China should keep improving institutional systems to prevent and resolve local government debt risks, the country's vice finance minister said on Saturday (Jan 15).

Xu Hongcai told a forum in Beijing that China should balance the promotion of investment with the prevention of risks, including in determining the scale of new government debt, and prevent excessive debt growth from affecting fiscal operations.

The ministry will work together with the National Development and Reform Commission to strengthen management of investment areas for special bonds, including prohibitions on funding vanity projects and projects not in the public interest, he said.

China will also crack down on illegal and irregular debt raising, and back-door debt financing, he said.

The call for improved risk controls comes as China plans to speed up the issuance of local government special bonds this year to help boost investment and cushion a slowing economy.

Source: Reuters/gs

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