China’s New VCs: Transformation of Local Government Financing Vehicles

In the wake of COVID-19 and the collapse of the property market, Local Government Financial Vehicles (LGFVs), which are SOEs created to borrow on behalf of local governments, had over $8 trillion in debt in 2022.  This massive debt has caused some localities to decrease public services.

How are local governments coping with this debt?  What happened to LGFVs when land finance became defunct Recent research, including fieldwork conducted in China, reveals a surprising finding—LGFVs have become the new VCs in many of China’s localities.

In this talk, Professor Jean Oi will examine why and how LGFVs, burdened with debt, are being transformed into local investment companies deciding funding for startups.     

About the Speaker

Jean C. Oi is the William Haas Professor of Chinese Politics in the Department of Political Science and a Senior Fellow of the Freeman Spogli Institute for International Studies (FSI) at Stanford University.

On leave from Stanford for the 2025-2026 academic year, she is the inaugural Goh Keng Swee Chair in Chinese Studies at the East Asian Institute at the National University of Singapore.

Oi’s research examines central-local relations in China’s political economy. Currently, she focuses on how local governments are coping with the collapse of land finance and the overhang from heavy local government debt after COVID-19.

The ANU China Seminar Series is supported by the Australian Centre on China in the World at ANU College of Asia and the Pacific.