Local government debt reached 92 trillion yuan ($12.58 trillion), or 76% of the country's economic output in 2022, up from 62.2% in 2019. Reuters is reporting these measures for banks to defuse local debt risks for the first time. Banks are being encouraged to issue new loans to LGFVs to repay bonds and non-standard debt, the sources said. And, Chinese investors are rushing to buy bonds of LGFVs, including from the riskiest issuers, as Beijing's attempts to reduce local debt risks encourages them to bet on an implicit government guarantee. Over 2.1 trillion yuan LGFV bonds matured in the first half of 2023, and another 1.75 trillion yuan in the second half of this year and 1.69 trillion yuan in the first half of 2024, the highest maturity pressure in history, the note said.

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Persons: Tyrone Siu, ”, National Financial Regulatory Administration didn't, Banks, CLIFF LGFVs, LGFVs, Simon Cameron, Moore, Kim Coghill Organizations: AIA Central, China Construction Bank, Bank of China, Cheung, Cheung Kong Centre, HSBC, Standard Chartered Bank, REUTERS, Rights, People's Bank of China, Reuters, Treasury, National Financial Regulatory Administration, Communist Party, ANZ Research, UBS, Financial, Beijing, Shanghai, Thomson Locations: Cheung Kong, Hong Kong, China, Rights BEIJING, Beijing, Tianjin, Guizhou, Guangxi