镇江债务问题解决的评述

China Town Builders Seen Following Zhenjiang Debt Experiment

Zhenjiang is tapped as test city for local debt resolution

China’s local government has a hidden debt problem: LianxunBy Bloomberg News

(Bloomberg) –?An?experiment?to fix local government debt problems in China’s eastern province of Jiangsu will spur more municipalities to come up with their own measures to ease risks, analysts say.

Jiangsu is considering making Zhenjiang a test city for the province to provide low-cost funding from the likes of China Development Bank, people familiar with the matter said on Wednesday. Other provinces will also likely roll out plans to cut local debt risks as slower economic growth and stagnating land prices put pressure on their fiscal revenue, according to Lianxun Securities Co.

While the move is in line with?policies?from a State Council meeting in July which encouraged financial institutions to meet local borrowing units’ “reasonable” funding demand, it also reinforces the moral hazard associated with government-orchestrated bailouts. Policy makers have been taking steps to shore up the economy threatened by the trade war with the U.S., with some economists?predicting?the first benchmark interest rate cut since 2015.

“Chinese local governments have a hidden debt problem,” said?Li Qilin, chief economist at Lianxun Securities Co. “When the liquidity conditions were good, refinancing wasn’t an issue. But when funds are harder to come by, those debts are becoming a problem.”

Read: China LGFV Bonds Jump After Zhenjiang Picked for Debt Resolution

The nation’s municipal government debts kept off their balance she