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China to step up efforts to tackle hidden debt: China Daily

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China will encourage local governments to make use of new financial instruments to reduce "hidden debt", China's Finance Minister Liu Kun said in remarks published by the official China Daily on Friday.

[SHANGHAI] China will encourage local governments to make use of new financial instruments to reduce "hidden debt", China's Finance Minister Liu Kun said in remarks published by the official China Daily on Friday.

In an essay published by the Chinese Communist Party's official theoretical journal Qiushi on Thursday, Mr Liu said China would implement new measures and "create better conditions" to help local authorities control their hidden debts.

The remarks suggest China will take even stronger action this year to tackle local government debt, which has been capped at 3.08 trillion yuan (S$614.4 billion), the China Daily said.

Some of the new measures could include the selling off and restructuring of state-owned assets or the reorganisation of projects, the China Daily said.

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China is under pressure to address spiralling local debt especially as its economy slows and a trade war with the United States intensifies.

Many previously issued bonds are also set to expire in the coming three years, and local government income from land sales is also expected to dwindle, the China Daily said. 

REUTERS