Some local government owned enterprises in China have begun pulling back from funding regional projects in response to a campaign from Beijing to curb implicit liabilities, amid fears of financial contagion.
Talk of financial risk management at annual parliamentary meetings serves as a high-profile reassurance of leadership’s repeated vows to curb financial risks and alleviate revenue problems across the country.
Corporate bond financing in China’s Gansu province declined to 22.3 billion yuan (US$3.2 billion) in 2022 following the ‘technical default’ of a local government financing vehicle in 2021, according to a local financial official.
China’s total debt as a percentage of gross domestic product rose to 273.2 per cent as of the end of 2022, but could rise at a slower pace this year, according to the Economic Daily newspaper.