China Unveils New Rules to Cope with Massive Local Government Debt

(Beijing) — China has announced new rules on how it will deal with several trillion dollars in local government debt as part of its efforts to curb financial risks and maintain social stability as economic growth slows.

The new rules classify provincial and local debt by severity, restrict further borrowing and investment in many cases, and order delinquent borrowers to sell assets, restructure fiscal spending and even lay off staff.