In Depth: Cash-Strapped Local Governments Turn to Financing Vehicles to Plug Fiscal Shortfalls

Local government financing vehicles (LGFVs) have played a key role in China’s economic and social development over the past two decades, especially in funding and building infrastructure investment on behalf of local authorities across the country.

Since last year they’ve been given yet another task by their local government masters — buying land and building homes to fill a massive funding gap triggered by a slump in revenue from land as cash-strapped developers disappeared from the market.