China's local government recessive debt increase in the short term is difficult

The recent measures taken by the Chinese government to curb local government irregularities are unlikely to be immediate. The S & P Global Ratings report today issued a report titled "China's recent efforts to remediate local government's implicit debt."

"We believe that through fundamental fiscal reform to solve the local government's fiscal expenditure and income mismatch problem is to curb the local government to rely on government financing platform for public infrastructure investment key," S & P global rating analyst Liu Xin said The "Because the local government financing platform for the local government to play the policy role in a short time is difficult to be replaced.

For China, the prevention and control of local government debt risk is a continuing policy challenge. Even if only the local government has the obligation to repay the liability and the identified security and contingent liabilities, the local government's debt burden has been very high.

"We believe that the important financing platform for local governments will continue to benefit from the support provided by local governments," Liu said. "In particular, the vast majority of the debt of these financing platforms has been included in the scope of government debt."