Local Government Debt
Examining LGFVs and structural risks in municipal finance.
The LGFV Dilemma
Local Government Financing Vehicles (LGFVs) hold an estimated 66 trillion RMB in debt (2023), representing a significant systemic risk.
Beijing is currently orchestrating a debt swap program, allowing provinces to issue special refinancing bonds to pay off high-interest, off-balance-sheet LGFV debt.