China to Enhance Supervision of Government Debt

BEIJING (Reuters) – China aims to step up supervision of government debt and plans to revise the law to do so, a spokesperson of the legislative affairs committee of the National People's Congress (NPC) said on Friday.

The changes proposed by the NPC's standing committee will require annual progress reports on debt management work from the cabinet and local governments, the spokesperson, Huang Haihua, told reporters.

Huang stated that the committee "should supervise government debt and establish a sound reporting system for government debt management."

Draft amendments are set to be discussed when the standing committee meets from Nov. 4 to Nov. 8, aiming to expand its oversight authority over government debt management, as well as financial and economic work.

Last month, Finance Minister Lan Foan said China would "significantly increase" government debt to support consumers and the property sector, though details on the scale or timing of these measures were not provided.

Reuters reported that China is considering approving new debt issuance of more than 10 trillion yuan ($1.4 trillion) next week to address hidden local debt, fund buybacks of idle land, and reduce a large inventory of unsold flats, with decisions expected by the end of next week's meeting.

The standing committee of the National People's Congress, or China's parliament, will also supervise the financial and economic work of the cabinet and local governments and review reports on fixing issues identified in audits, Huang added.

($1 = 7.1220 Chinese yuan renminbi)