China calls for improved risk controls

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China calls for improved risk controls

BEIJING: China should keep improving institutional systems to prevent and solve local government debt risks, the vice finance minister said on Saturday Xu Hongcai told a forum in Beijing that China should balance investment with the prevention of risks, including in determining the scale of new government debt, and to prevent excessive debt growth from affecting fiscal operations.

He said that the ministry will work with the National Development and Reform Commission to strengthen management of investment areas for special bonds, including prohibitions on funding vanity projects and projects that are not in the public interest.

He said that China will crack down on illegal debt raising and back-door debt financing.

The call for improved risk controls comes as China plans to speed up the issuance of local government special bonds this year to help boost investment and cushion a slowing economy.