BEIJING (Reuters) -China’s Ministry of Finance set up a new debt-management department, it said on Monday, the latest step in its effort to rein in local debt risks as the economy slows.
The department’s main responsibilities will include formulating and implementing systems and policies for managing central and local government debt, as well as drafting regulations and measures for debt-related management, according to the ministry’s website.
The department will help set limits on outstanding national and local government debt, manage the issuance and repayment of government borrowings and oversee risks – particularly those associated with implicit debt.
Li Dawei has been named the head of the department, the ministry said.
Last year, China unveiled a 10 trillion yuan ($1.40 trillion) debt package to ease local government financing strains and stabilise flagging economic growth.
China has been trying to tackle debt accumulated through local government financing vehicles, which Beijing refers to as implicit or “hidden debt”.
In September, Finance Minister Lan Foan said China would enhance its debt-management mechanisms to align with high-quality economic development over the next five years.
($1 = 7.1230 Chinese yuan renminbi)
(Reporting by Ethan Wang and Kevin Yao; Editing by Tom Hogue and Thomas Derpinghaus)
