China’s Finance Minister just recently called for strengthening efforts to curb local government debt. This is a result of the sharp rise in borrowing by governments to try to boost the slow economy. Finance Minister Xie Xuren said said that they need to create more prevention of financial risk but that they also need to have a financing mechanism for local governments.
Bonds that were issued by local government financing organizations totaled 636.8 billion yuan last year. This was more than double the amount in 2011 as the central bank-backed China Central Depository & Clearing Co. said in a previous report.
The Minister also urged local governments to do a better job with their own fiscal policies to boost the economic growth in the area.