Resolving local debt risks in China for local debt limit spaces are expected to be ena

The 21st Century Economic He reports quoted local financial sources in China that the measures that resolve local debt risks in the second half of the year have already been preliminary deployment.Essence

On July 24, the Politburo meeting of the Communist Party of China deployed the economic work in the second half of the year. The meeting pointed out that it is necessary to effectively prevent and resolve the risk of local debt and formulate a package of debt.

The 21st Century Economic Herald reported on Wednesday (August 16) that local financial parties in a province in China said that after the Politburo meeting, it had held a hair drying meeting around the prevention and resolution of local debt risks.Space to resolve stock debt, but the specific amount and detailed rules have not been clear.

The 2022 Central Capital report disclosed by the Ministry of Finance of China showed that as of the end of 2022, the balance of local government debt was about 3.507 trillion yuan (RMB, the same below, about S $ 6.53 trillion), and controlled it to control it atThe local government's debt limit approved by the National People's Congress is within 3.765 trillion yuan.This means that the balance of the local debt is 2.58 trillion yuan from the statutory limit.

Reported, but from a historical point of view, it is more cautious about using local debt limit space.

Local disclosure information shows that since 2019, multiple counties such as Hunan, Guizhou, Yunnan, Liaoning, Inner Mongolia, Gansu, Sichuan and other provinces have been incorporated into the pilot of hidden debt resolution.The establishment of the pilot county, the debt limit space is called to resolve part of the hidden debt, that is, to repay the hidden debt of the stock by issuing reinstated financing bonds.

The 21st Century Business Herald reports that although there are still more than 2 trillion yuan in local debt limit space by the end of 2022, the distribution of different provinces is unevenly distributed between different levels of government.

According to the budget report of the 2023 of each province, as of the end of 2022, the balance between the debt balance of Shanghai was 276.5 billion yuan, the scale is the top; the difference between the debt balance and the limit of the provinces in Jiangxi, Jiangsu, Xinjiang, Beijing, and other provinces exceeded 150 billion yuan; Some provinces have a small scale of debt limits. For example, Heilongjiang is 12 billion yuan, Hunan is 18.7 billion yuan, and Chongqing is 21 billion yuan.

The limited space of some provinces is concentrated at the provincial level, and the limited space limit space of the prefecture -level municipal government has limited space.For example, the 2022 local debt limits and balance final accounts (excluding Ningbo) announced by the Zhejiang Provincial Department of Finance show that as of the end of 2022, the gap between the debt balance and limit of Zhejiang (excluding Ningbo) of Zhejiang Province (excluding Ningbo) is about 39.3 billion yuan, of which the debt in Zhejiang Province's debt at the level at the level of Zhejiang ProvinceThe difference between the balance and the limit is about 39.1 billion yuan, and the remaining 10 prefecture -level debt balances and limited spaces do not exceed 100 million yuan.

Bai Yanfeng, a professor at the School of Finance and Taxation of the Central University of Finance and Economics, analyzed the 21st Century Business Herald. Considering that the current financing interest rate is very low, personal mortgage is repaid or re -re -rectified. The scale of local debt is huge.The time window replacement, this is an important measure to reduce debt costs and alleviate insufficient investment in investment.Of course, in this process, the issue of debt rationality must be strictly identified to prevent debt of unreasonable causes to take this opportunity to rectify the risk of local debt.

Bai Yanfeng said: "The debt merger supervision is mainly the merger and supervision of statutory debt and hidden debt to avoid the" Tibetan cat 'between statutory debt and hidden debt.Combining unified divisions, the legal debt and hidden debt should be coordinated into supervision, but different types of debt need to be handled separately. "

Many local fiscalities point out that behind the local debt is the problemCopy, but it takes more effort to treat the symptoms and treatment.