There's this rumor-ish CNBC piece from 2011 (which is actually quoting Reuters on this part) claiming that:

China’s regulators plan to shift 2-3 trillion yuan ($308-463 billion) of debt off local governments, sources said, reducing the risk of a wave of defaults that would threaten the stability of the world’s second-biggest economy.

As part of Beijing’s overhaul of the finances of heavily-indebted local governments, the central government will pay off some of their loans [...]

Did China ultimately do something like that back then (2011)?

(I'm asking in part because in early 2023, the Chinese central government seems to have adopted a different line:

The ministry said in a reply to a top advisory body that it will deal with hidden outstanding local debt "in a law-based, market-oriented manner without resorting to central government bailouts," the state-backed China Daily newspaper reported.

So, I'm also curious if there was some kind of backlash for the 2011 events--whatever they were, just cheap talk or actual bailouts. Also, China was ruled by the Jintao people back then, so that might explain the different approach. Also, I found out in the meantime that a "no bailouts" commitment was made in the "the No.43 document issued by the State Council in 2014".)

Still, mainly I'm having trouble finding some story that says how those 2011 bailouts (or whatever you want to call the financial help they might have given to local governments back then) actually happened, as opposed to that initial announcement of how they were supposedly planned.

  • Now I've read a fairly in-depth article on the post-2008 changes in the financing of local debt in China [which were quite interesting] but it says nothing about this alleged 2011 bailout in any way, although LGBs were gradually swapped for LGFPs over the course of some years as the main instrument of local finance. There is more central control over LGBs. I'm starting to wonder if the story I quoted above was fake news.
    – Fizz
    Sep 1 at 13:17
  • The closest episode in that paper that bears some resemblance is that between 2009-2011 the pilot form of LGBs [which only select localities were allowed to enjoy] was repaid by the MOF.
    – Fizz
    Sep 1 at 13:19


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