[ad_1]
Shanghai (China), Nov 1 (EFECOM).- Chinese authorities promised to “strengthen financial supervision” to “effectively avoid and deactivate risks” at a time when various local and regional governments in the country are experiencing debt problems. and the real estate crisis hampers economic recovery.
This is one of the main conclusions of the statement released last night by the official press after the sixth “Central Financial Work Conference”, an important summit held every five years since 1997 and which brings together national leaders, regulators and bankers to debate financial and development policies.
“We must stick to risk prevention and control as an eternal theme of financial work,” indicates the final statement of the conference, held behind closed doors for two days and headed by Chinese President Xi Jinping, along with the other six members of the almighty Standing Committee of the Politburo of the Communist Party (CPC).
The document recognizes that “there are still many hidden economic and financial risks” and that “problems of corruption and financial chaos continue to arise”, which is why it points to the need to “reinforce” the “weak” supervisory capacities of the sector, on the which the ruling CCP will seek greater control.
“We must be soberly aware that the various contradictions and problems of the financial sector are interrelated and influence each other, and that some of them are very notable,” he adds.
One of the topics discussed at the meeting was the aforementioned debt problem of local governments, which, according to the International Monetary Fund, would accumulate some 9 trillion dollars of “hidden debt” – more than double that in 2017 – through channels informal financing groups known as LGFV, semi-public entities created to circumvent the debt limitations of regional authorities and spread throughout China since the 2008 crisis.
The aforementioned figure would be added, as the Hong Kong newspaper South China Morning Post recalls today, to another 5.2 trillion dollars of official debt within the local and regional governments of China, which have been allowed to issue since the end of September refinancing bonds for about 137,000 million dollars to meet the maturities of its debt.
“(It is necessary) to establish a long-term mechanism to prevent and resolve local debt problems (…) and optimize the debt structure of local and central governments,” the statement indicates.
Regarding the crisis in which the real estate sector has been mired for more than two years, the Conference promised to improve the macroprudential management of this industry or satisfy the “reasonable needs” of financing of developers, both state and private. EFECOM
vec/lcl/sgb
[ad_2]
