A $2 trillion swathe of China’s local bond market is approaching a risky inflection point as issuers struggle to refinance maturing debt.
Net financing — new yuan bond issuances minus maturities — for the country’s local government financing vehicles, or LGFVs, turned negative in the fourth quarter of 2022 for the first time in at least four years, according to data provided by S&P Global Ratings. While the measure turned positive in January, it was still down 83% from a year earlier at 48.9 billion yuan ($7.1 billion).
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