Financial relief efforts for China’s Guizhou province reflect a slight softening of Beijing’s stance on local government debt and could be an indicator of a worsening national economic slowdown. On Jan. 26, China’s State Council laid out plans to assist the southern province of Guizhou in managing its debt load and resuming development projects. Guizhou is one of China’s poorest provinces and has defaulted on 68 debt products since 2018, the most of any province in the country. The State Council will allow Guizhou to renegotiate payment plans with financial institutions and restructure its debt, in addition to raising Guizhou’s debt limit to allow the construction of government-approved (i.e. not real estate) investment projects. This program for Guizhou runs counter to Beijing’s recent efforts to reduce debt risks, and shows Beijing’s concerns for local economic health....
