China’s top lawmakers approve plan to swap local government debt

This relates to this matter as posted earlier in the week: China are reportedly reviewing a bill to raise local government debt ceilings

It is essentially just a left pocket, right pocket move to switch China’s “hidden debt” to be back on the balance sheet. This so that Beijing can easier and better help local governments to resolve the debt issues they are facing. The NPC has also said that they have approved plans to increase the local debt ceiling as such, as expected.

The package is ¥6 trillion to resolve the debt issues and that is the same as what was touted specifically for local government debt risks last week in the leaked report here. We’re still waiting to hear on other stimulus measures though.

This article was written by Justin Low at www.forexlive.com.