(Bloomberg) -- China’s eastern province of Jiangsu has further tightened its scrutiny on offshore borrowings by local-government financing vehicles, adding another layer of reporting process as the nation ramps up efforts to defuse debt risks. 

Jiangsu, one of China’s most affluent provinces and a major industrial center, has required LGFVs to register their offshore bond sales plans with the local government, according to people familiar with the matter. The goal is to better manage overseas issuance and curb debt financing costs, said the people, who asked not to be identified as they aren’t authorized to publicly discuss the issue.

While the LGFVs have to seek official approval from the National Development and Reform Commission, the state planner, Jiangsu’s new procedure also requires registration with the Ministry of Finance’s local branch, the people said. Some of the planned issuances have been delayed given the need to adhere to the latest change, they said.  

The finance department of Jiangsu’s provincial government didn’t respond to an email from Bloomberg News seeking comment, while the Ministry of Finance didn’t respond to a fax query on whether the province’s approach was a pilot project. 

China’s local governments are under intense financial pressure as an economic slowdown hits revenue, with a years-long real estate crisis undermining income from land sales to builders. With the country’s LGFVs estimated to be sitting on some $9 trillion pile of debt, resolving risks and avoiding default in the troubled market has become a major task for authorities. 

READ: China’s LGFV Insiders Say $9 Trillion Debt Problem Is Worsening

Jiangsu has more than $17 billion of offshore LGFV debt outstanding, accounting for 10% of the total and ranking third among all provinces, according to Beijing G Capital Private Fund Management Center LLP, which cited data from Wind Information Co. It’s also one of the biggest issuers of onshore LGFV bonds, according to Bloomberg-compiled data, with 3.3 trillion yuan ($452 billion) outstanding. 

While it’s unclear whether the model will be adopted elsewhere, Jiangsu’s moves are yet another sign that the scrutiny over LGFVs are getting stricter from all levels of administration. Debt burdens are already high and growing for provinces including Tianjin, Henan and Jiangsu, with direct debt and LGFV debt surpassing 300% of total fiscal revenue, Moody’s Investors Services said in August. 

--With assistance from Dorothy Ma.

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