Local Govt Financing 'Cleanup' to Be Started

BEIJING, July 26 -- China's central government plans to issue rules for the "cleanup" of local government financing vehicles, the Shanghai Securities News reported, without saying where it got the information.

The National Development and Reform Commission, the Ministry of Finance, the People's Bank of China and the China Banking Regulatory Commission plan to jointly issue the rules, the Shanghai-based newspaper reported. Local governments will have to submit reports by the end of this year on how they've strengthened management of their finacing vehicles, according to the report.

Financing vehicles that rely on fiscal government funds to repay loans will no longer be allowed to borrow, the newspaper reported. Local rail transport projects will be allowed to continue borrowing, according to the report.