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Further Measures to Tackle China’s Local-Government Debt Risk Probable
Chinese authorities are likely to implement further measures to ease refinancing pressure at local-government financing vehicles (LGFVs), with the issue rising in priority for policymakers, says Fitch Ratings. We expect the measures to involve greater inter-governmental coordination and reflect a degree of policy continuity from current approaches, such as calling for provincial governments to take a greater role in managing the debt burdens of lower-tier local and regional governments (LRGs). However, some measures are likely to remain targeted and will not reduce LRGs’ rapidly climbing debt levels. The Politburo ... (full story)