BEIJING Oct 18 China's finance ministry has
embarked on a fresh investigation into the amount of outstanding
debt held by local government financing vehicles (LGFVs) and
state-owned enterprises, the 21st Century Business Herald
newspaper reported on Tuesday.
The investigation is examining LGFVs' various funding
sources, including not only bank loans, bonds, but also non-bank
credits and supplier payables, in an effort to reduce financial
risks, according to the report, which cited a notice sent around
the provinces by the Ministry of Finance.
LGFVs play a vital role in supporting China's state sector
investment, but have also been a source of non-performing debt
in the past.
Transparency has long been a problem for policymakers
seeking to understand the scale and potential risks of LGFV
Bond issuance by Chinese local government investment
vehicles this year exceeded 1.2 trillion yuan as of Sept. 2,
more than all of 2015.
(Reporting By Shu Zhang; Editing by Simon Cameron-Moore)