Is China’s local government debt a concern and what role do LGFVs play in infrastructure spending?

Nov 2, 2021 | INVESTING

Local government debt in China is broken down into two parts, namely explicit and implicit debt.Explicit debt is local governments’ on-budget liabilities that are recognised by the central government, while implicit debt includes off-budget borrowing that is not recognised by the central government. Implicit debt also includes borrowing by local government financial vehicles (LGFVs).What are LGFVs?Bonds sold by local government financing vehicles, or LGFVs, are one of the ways provincial…

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