flawless paperwork
Yi Xianrong, a finance professor at Qingdao University, said it was common for “flawless” paperwork about Chinese debt to cover “enormous dangers” on the ground.
“Local officials often play with the rules, collude with agencies, and get their pet projects funded,” Yi said. “They try their best to leverage the financial market and get financed, exposing investors and ultimately the ordinary people to risks of default.”
In one case of fraud that has been exposed, Song Xueying, the former land bureau chief in the Heilongjiang city of Jiamusi, confessed to issuing a forged land use rights certificate in 2009, on the orders of a city government official, to help the local LGFV to get billions of yuan of financing. In another case, an LGFV in Gongyi, just west of Xingyang, used land it did not own as collateral for a billion yuan debt issue in 2013.
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