Moody's praises efforts at containing local debts
By Feng Jianmin |
March 20, 2012, Tuesday
|
Print Edition
Print Edition
CHINA has managed to effectively contain local government debts and this is credit positive for its Aa3 rating, Moody's Investors Service said yesterday.
"Efforts by China's policymakers to tighten bank lending rules and direct local governments to curb borrowing are having the desired effect," Moody's said in a report.
The ratings agency said Premier Wen Jiabao's announcement last week that the inclusion of local government debt in the central government fiscal budget will increase transparency as well as impose greater discipline and scrutiny on local government investment and borrowing plans.
Wen also said all new debts in the future will be included in the fiscal budget and supervised by the local and national people's congress.
The China Banking Regulatory Commission has detailed how banks can roll over some loans lent to local government financing vehicles.
The CBRC has divided the local government debts into five categories. For example, local government financing vehicles with sufficient funds but uncompleted projects can extend their payment by agreeing with the banks. The vehicles with insufficient funds and can't attract private funds will be banned from bank borrowing and the debts have to be paid by installments from fiscal revenue.
"Efforts by China's policymakers to tighten bank lending rules and direct local governments to curb borrowing are having the desired effect," Moody's said in a report.
The ratings agency said Premier Wen Jiabao's announcement last week that the inclusion of local government debt in the central government fiscal budget will increase transparency as well as impose greater discipline and scrutiny on local government investment and borrowing plans.
Wen also said all new debts in the future will be included in the fiscal budget and supervised by the local and national people's congress.
The China Banking Regulatory Commission has detailed how banks can roll over some loans lent to local government financing vehicles.
The CBRC has divided the local government debts into five categories. For example, local government financing vehicles with sufficient funds but uncompleted projects can extend their payment by agreeing with the banks. The vehicles with insufficient funds and can't attract private funds will be banned from bank borrowing and the debts have to be paid by installments from fiscal revenue.
- About Us
- |
- Terms of Use
- |
-
RSS - |
- Privacy Policy
- |
- Contact Us
- |
- Shanghai Call Center: 962288
- |
- Tip-off hotline: 52920043
- 沪ICP证：沪ICP备05050403号-1
- |
- 互联网新闻信息服务许可证：31120180004
- |
- 网络视听许可证：0909346
- |
- 广播电视节目制作许可证：沪字第354号
- |
- 增值电信业务经营许可证：沪B2-20120012
Copyright © 1999- Shanghai Daily. All rights reserved.Preferably viewed with Internet Explorer 8 or newer browsers.
