The recent loan restructuring of a local government financing vehicle in China has shone a light on the country’s $7 trillion of “hidden” debt. Local government financing vehicles (LGFVs) are mostly tasked with building infrastructure projects and allow local authorities to raise money without having the debt appear on the government’s balance sheet. These “hidden” debts and contingent liabilities have risen to 47 trillion yuan ($7 trillion) in September, up from 20 trillion yuan at the end of 2016, according to Absolute Strategy Research. While LGFVs have never defaulted, markets are starting to get worried and shunning some weaker borrowers. This hidden debt remains a “grey rhino” – a high-risk threat that is often ignored until it’s too late. Given the information in the story, the sell recommendation is likely to be the best option. The sentiment of the story implies that the risk of default is rising and that markets are starting to become more cautious. This suggests that it may be wise to sell any investments related to the LGFV in order to avoid any potential losses.