Shell game

摘要

Eedless arcane pronouncements spew forth from China's bureaucracies. But some matter much more than others. In recent weeks a number of the country's senior leaders and regulators have signalled an end to the practice of local governments extending guarantees on loans taken out by their special financing entities. That could spell big trouble for Chinese banks.rnThe comments have focused attention on research done by Victor Shih, a professor of Northwestern University in America, into China's local investment companies. These financing vehicles allow municipalities to circumvent central-government restrictions on direct borrowing. As many as 8,000 of these investment companies may exist, estimates Mr Shih, whose work draws on regulatory filings and various government announcements.