China’s Vice Chairman of the NPC Financial and Economic Affairs Committee disclosed plans to increase the local government debt ceiling by 6 trillion yuan, aiming to replace existing debts and mitigate local debt risks.
The move towards swapping hidden debts is anticipated to address issues surrounding local government financing vehicles and prevent the accumulation of new debt.
Furthermore, China’s Finance Minister emphasized the significance of allocating 6 trillion yuan towards resolving hidden debts as a pivotal policy decision. Additionally, an annual allocation of 2 trillion yuan for debt swaps is planned, signaling a proactive approach to manage and alleviate the impact of hidden debts on the economy.
In summary, the approved adjustments to local government debt ceilings and the strategic focus on debt replacement and risk mitigation reflect China’s commitment to financial stability and sustainable economic growth.
