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Debt risks from China’s local government financing vehicles have narrowed substantially during the 14th Five-Year Plan period, according to the country’s central bank governor, Pan Gongsheng.
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The People’s Bank of China has achieved significant progress in addressing these debt risks, with the number of financing vehicles falling by more than 60 percent and the scale of associated financial debt dropping over 50 percent, he said.
Pan said the PBOC has been pushing local governments to coordinate funds, assets, and resources to reduce debt risks.
Authorities are stripping financing platforms of government financing roles and transforming them into market-oriented entities, while guiding financial institutions to restructure debts to lower liquidity pressures and interest burdens, he added.
On real estate, Pan noted that the central bank has optimized down payments and mortgage rates, and reduced interest rates on existing home loans. These measures are expected to save roughly 300 billion yuan (HK$327.71 billion) annually for more than 50 million households, he said.
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