- Local governments in China boosted their revenues last year by selling land to their own investment vehicles.
- More than half of the Rmb2.2tn ($316bn) in residential property plot sales by local Chinese authorities in 2022 were made to local government financing vehicles (LGFVs).
- Land sales are a crucial source of revenue for China’s local governments, which are responsible for everything from roads to healthcare and education.
- Local governments reported the biggest decline in fiscal revenue in decades last year as Beijing’s zero-Covid policy stifled growth and forced them to foot the bill for mass testing and quarantines.
- Over Rmb4.7tn in LGFV bonds will come due this year.
Financial Times — World — Local Government Financing Vehicles (LGFVs) — Chinese Politics & Policy — Property Sector — Chinese Economy
China’s local governments boost revenue by selling land to their own entities
Cash-strapped local governments in China artificially boosted their revenues last year by selling swaths of land to their own investment vehicles. This has raised concerns about the extent of their financial woes.