(Beijing Comprehensive News) In order to slowly release the risk of liquidation of local governments, Chinese officials are reported to require policy banks and large state -owned banks to increase loan support for local government financing platforms.
According to Bloomberg News on Wednesday (October 18), people familiar with the matter are quoted, after urging the bank's exhibition and extended maturity period, the State Administration of Financial Supervision of China recently issued a clearer instruction, requiring banks to use lower interest rates at lower interest ratesExtension of local government debt.The instruction also stipulates that local governments repay a certain amount of principal each year.
People familiar with the matter said that the loan agency was also told to issue loans to replace the unconventional high interest rate debt of the local government's financing platform and provide support for 12 high -risk provinces.The People's Bank of China is setting up an emergency loan mechanism to provide support for local governments with difficult repayment.
Caixin.com reported in August this year that China plans to allow local governments to issue 1.5 trillion yuan (RMB, Same, Same, 280.8 billion yuan) special recyclable bonds for repaying stock debt.
Since October this year, special recycling bonds have been issued in many places in China, of which the issuance scale of Inner Mongolia, Yunnan and Liaoning has exceeded 100 billion yuan.
China official has not disclosed the scale of local government's hidden debt, but according to the International Monetary Fund (IMF), the total hidden debt in 2023 is expected to reach 6.57 trillion yuan.
