Beijing is inviting potential bidders to upgrade its national system for monitoring local government debt, including around 700,000 financing vehicles.
The procurement by China’s Ministry of Finance calls for a national system upgrade with the aim of «logging every change of debt at any financing vehicle».
The current system, introduced in September 2018, already keeps track of various data including the debt held by individual vehicles; the type of debt; its maturity, repayment information; asset quality; and valuations.
Local Debt Worries
Incidents like the government seizure of Baoshang Bank or the several other bank rescues this year are fueling concerns about local debt. Data from the ministry indicates that Chinese local debt totaled 21 trillion yuan ($3 trillion) – doubling mid-2013’s $1.5 trillion.
But S&P estimates place the real figure at a much higher level, especially when considering off-balance sheet debt from what is known as local government financing vehicles (LGFVs). A report released earlier this month projects total government debt at up to $6 trillion, calling it a «debt iceberg with titanic credit risks».
