The Risks of LGFV Defaults in China

It really depends on whether we see isolated distress in LGFVs in some provinces or well spread defaults, and it's also possible that the former leads to the latter. In that case, we would expect the governments at various levels to share the financial burden of the crystallization of contingent liabilities. But as I said, we do not expect the widespread default of public bonds by LGFVs because their government owners or upper tier governments will intervene if they proceed to the need.