The Institute of Finance of China Academy of Social Sciences and China Credit Rating Co reached a deal to set up a credit rating system for local government debt, the Securities Times reported. The National Audit Office in August began its first ever investigation into local government debts, which are estimated at 20 trillion yuan, including 9.7 trillion yuan funneled through local government financing vehicles, which are government-company hybrids established to get around strict borrowing restrictions and secure loans from unfettered lending after the central government introduced the 4 trillion yuan fiscal stimulus in late 2008 to maintain growth against the global financial crisis.

 

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