China’s soft economic recovery raises contingent liability risks from LGFVs
Moody's Talks - Emerging Markets Decoded
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The Rise of LGFVs in the Public Sector
Local governments create LGFVs to carry out essential advancements. They do not typically generate a lot of revenue, so some periodically need financial support from the government owner. There's a regulatory trigger because the central government is trying to tighten control over LGFV debt. Another factor is actually a transmission of risk from the property sector.
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