Reuters alone with news China plans to clean up billions worth of local government debt

Reuters broke the news that China’s regulators have plans to move a massive amount of debt off the books of local governments, telling the world that China was soon going to address an issue that has for a while been regarded as the Achilles’ heel of the world’s second biggest economy. Reuters reporters were alone with the news, basing the May 31 story on exclusive tip-offs from sources close to the country’s leadership and generating huge interest in chatrooms, blogs and other media. Reuters was unmatched with the story a day after we broke the news. Bloomberg and Dow Jones picked up the Reuters story, as did numerous websites. Political risk consultancy Stratfor quoted Reuters and said the “the leak suggests that grave debates are under way among China’s leaders about how to manage growing risks to financial stability before the leadership transition in 2012”. Reporting in China’s tight lipped regulatory climate takes persistence, patience and caution. In the end, Reuters diligence paid off. The news bred great interest in the markets, but also among regulators, some of whom weren’t aware of the plans. On Wednesday, a day after the exclusive reporting, Reuters served up its clients with insight based on what analysts thought were the implications for the big four Chinese banks, and the economy.