Chinese LGFV Bond Sales Slide to Five-Year Low on Risk Curbs

Bond sales by China’s local government financing arms have fallen to their lowest level since 2020, a sign that Beijing’s efforts to curb the risks of hidden debt are starting to pay off.

Chinese local government financing vehicles, or LGFVs, have sold a combined $580 billion of bonds across all currencies so far this year, according to data compiled by Bloomberg. That’s a 13% drop from the same period last year, and a 26% decline from a peak in 2023, when China’s central government stepped inwith emergency support to head off potential defaults.

The dropoff in issuance indicates a ...