Special Report

A Primer On China’s Local Government Debt

26 Apr 2023

by Qingyun Xu, Associate Editor Arthur Budaghyan, Chief EM/China Strategist

Government financing vehicles (LGFVs) are a key component of China’s credit system. LGFV bonds make up a 40% share of the onshore corporate bond market, and loans to LGFVs make up 20% of total loans. LGFV debt-servicing capacity is very weak. What are the ramifications of all of these for Chinese economic growth and financial markets?

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BCA Research | China Investment Strategy

Evaluates both the cyclical trends and structural developments of China's economy, offering investment recommendations for China and the Greater China Region.