China’s Local Government Debts and Bond Market: Clarification and Policy Choice

Wang Guogang

Institute of Finance and Banking, Chinese Academy of Social Sciences (CASS), Beijing, China

Abstract:  The surge in China’s local government debt has made various sectors of society pay closer attention to the situation. First of all, four types of debt relations must be clarified: the relationship between asset and non-asset debt, the difference between long-term and short-term debt, the difference between debt in the form of bonds and debt in the form of bank loans, and the difference between debt listed in government budgets and other government debt. The development of long-term bonds is a fairly good choice for China to upgrade its consumption structure, accelerate urbanization, transform its economic development patterns, and meanwhile,  to alleviate the mismatch between the financial powers of local governments and their administrative responsibilities.

Keywords:  debt relations, long-term bonds, market development

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