China’s central bank governor vows emergency liquidity support as Chinese govt debt level in middle to lower range internationally
Published: Nov 08, 2023 11:24 AM
Chinese yuan Photo:VCG

Chinese yuan Photo:VCG

The overall debt level of the Chinese government is in a middle to lower range by international standards, and the authorities have taken multiple measures this year to actively support local governments dissolve debt risks, Governor of People's Bank of China Pan Gongsheng said at the opening ceremony of the Financial Street Forum annual conference held in Beijing on Wednesday.

Firstly, local governments are urged to raise funds to pay back debt through liquidizing or selling assets. Second, tight control has been imposed on new government-invested projects in regions where the debt burden is relatively heavy.

Third, the authorities have guided financial institutions to help dissolve existing debt risks and control newly-added debts through a variety of measures including debt extension, using new loan to repay old loans and debt swap. Meanwhile, the authorities have conducted regular supervision on financing vehicles' financial liabilities.

The central bank will provide emergency liquidity support to regions with relatively heavy debt burdens where necessary, Pan said.

Fourth, local governments are encouraged to gradually spin off local government financing vehicles through acquisitions and mergers, asset injection and other measures and transform to market entities whose operations could sustain without government credit, he said.