Beijing backtracks on restrictions for local government debt vehicles

China’s State Council announced on Friday that authorities have relaxed limits on the ability of local governments to raise money though the same government-sponsored financing companies blamed for rapidly growing local debt in recent years, The Wall Street Journal reported. The move restores a backdoor that was closed in October and which was meant to push the broader economy away from reliance on big investments and toward consumer spending. In backtracking on this program to clean up local debt, Beijing appears to be ready to resort to greater stimulus measures to meet GDP targets, though the loosening only applies to funding for previously established projects.