Small font size A Larger text size A Largest text size A

China unveils steps to tackle 'hidden' debt of local goverments

BY Reuters | ECONOMIC | 11/08/24 03:14 AM EST

BEIJING, Nov 8 (Reuters) - China will allow local governments to issue 6 trillion yuan ($838.77 billion) in bonds to swap for off-balance sheet or "hidden" debt over three years, an official said on Friday.

China's top legislative body, the standing committee of the National People's Congress (NPC), approved a bill on raising ceilings on local government debt during a meeting from Nov. 4 to 8, said Xu Hongcai, vice chairman of the financial and economic affairs committee of the NPC.

Xu, who made the remarks at a press conference in Beijing, added that the debt swap would help resolve local debt risks. ($1=7.1533 Chinese yuan renminbi) (Reporting by Kevin Yao; Writing by Ellen Zhang; Editing by Clarence Fernandez)

More Fixed Income News

All Fixed Income News

In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

fir_news_article