Beijing widens support to tackle debts

China is widening support for local governments to tackle debts and despite a funds crunch is raising more than 200 billion yuan (HK$211.15 billion) for a fund to develop its chip prowess.

Beijing will now allow 19 more provinces to report key areas for debt relief, according to a Caixin report. Together with the 12 provinces mentioned in a document issued by the General Office of the State Council last September, the scope of application covers even the wealthiest provinces.

Local government financing vehicles are estimated to have 4.65 trillion yuan worth of maturing bonds this year.

Meanwhile, developers that are seriously insolvent or can no longer operate must file for bankruptcy or restructuring in line with the country's laws and market rules, Minister of Housing and Urban-Rural Development Ni Hong said.

Though its debts are rising, China is not slowing its pace of investing in the semiconductor sector.

The National Integrated Circuit Industry Investment Fund is said to be amassing a pool of capital from local governments and state enterprises for its third vehicle that should exceed the 200 billion yuan of its second fund.

The fund is the largest chip fund to date and will be used to accelerate the development of cutting-edge technologies to counter a US campaign to thwart its rise.

In other news, Chinese chipmaker ChangXin Memory Technologies said it complies with US export regulations, after the US was reportedly said to be mulling blacklisting the company.