China State -owned Bank has reportedly providing long -term loans to local government

According to people familiar with the matter, China's large state -owned banks are providing ultra -long -term loans to local government financing platforms and temporarily exempt interest on interest.Under the pressure of the debt, the credit tightening is avoided.

According to the Bloomberg News Agency on Tuesday (July 4), in recent months, large state -owned banks such as Industrial and Commercial Bank of China and China Construction Bank have begun to add 25 years to the local government financing platform that meets the requirements.Most of the current loans of loans are 10 years.

Bloomberg quoted people familiar with the matter, saying that some new loans will be exempted from paying interest in the past four years, but interest will accumulate afterwards.It is reported that the total scale of this new growth loan cannot be determined.

Local Government Financing Platform (LGFV) is another financing method in which local governments in China not only issue government bonds in addition to issuing government bonds.Most of the LGFVs are in the form of urban investment companies. Local governments are regarded as "hidden debt" through LGFV borrowing. Although this type of lending is guaranteed by local government credit, interest costs are usually higher.

Bloomberg reports that the market is increasingly concerned about the LGFV debt market with a scale of $ 9 trillion.Although there are currently no public debt in urban investment, some cases that have only been paid recently at the last moment have caused the outside world to re -question the industry's ability to repay the debt.

It is reported that the market's concerns about the financial vulnerability of Chinese government's financial financial continued to increase, making policy makers cautious about starting a large -scale stimulus plan.At the same time, in order to prevent the government at the government level, the official had to expand financing.According to the estimates of Goldman Sachs Group, the total amount is about $ 23 trillion, including the government official lending and local government financing platforms and policy banks.

The media representatives of the Industrial and Commercial Bank of China and CCB headquarters in Beijing did not respond to the request of comment.