Shandong moves to curb LGFV debt

Authorities in Shandong province said they would not bail out the borrowings of cities or counties in the province, becoming the first region in China to follow the central government's campaign to curb regional debt.

Shandong has banned all new debt by local government financing vehicles, according to a statement dated Dec 10 and posted on its website on Thursday. Local governments should reasonably control financing demand for projects under construction, it said.

Questions about the future of LGFVs began in October when Premier Li Keqiang started to pare implicit guarantees for these bodies.