《歌手》今晚播出 郁可唯翻唱齐豫《飞鸟与鱼》

China will employ a package of targeted measures to further address local government debt this year, with a particular focus on accelerating the debt swap program, reforming local government financing vehicles, and curbing the accumulation of new hidden debt, officials and analysts said.

With the debt-relief package — a multipronged adjustment to ease local government financing pressure — the country is better positioned to pursue the broader agenda of fostering economic stability and progress, they added.

"We will continue to defuse debt risks in the course of development and pursue development in a debt risk-defused environment," said Premier Li Qiang last week while delivering the Government Work Report, which detailed the latest steps of the world's second-largest economy to defuse local government debt risks.

Feng Lin, executive director of research at Golden Credit Rating International, said, "The key is to maintain a clear-eyed view of the interplay between debt management and economic development, and ensure that the two are mutually reinforcing, rather than conflicting priorities."

Simply concentrating on debt reduction alone could stifle local governments' ability to invest in growth-enhancing initiatives, hampering their long-term development. Conversely, a development-centric approach that neglects debt risks would also undermine the sustainability of economic progress, Feng said.

Minister of Finance Lan Fo'an said at a news conference on Thursday that this year, his ministry will guide localities to expedite the issuance and utilization of a 2 trillion yuan ($276.44 billion) bond quota to facilitate the replacement of hidden debt.

In November, the Ministry of Finance introduced a 10 trillion yuan debt swap program to help local governments alleviate their financial pressures. This initiative aims to free up more funds and resources that can be channeled toward driving economic development.

As of Wednesday, local governments had issued bonds totaling 2.96 trillion yuan aimed at replacing existing debts. And the bonds issued last year for the replacement of 2 trillion yuan of local government debt saw an average reduction in interest rates by over 2.5 percentage points, Lan said.

It's estimated that these bonds will reduce interest payments by over 200 billion yuan over five years, significantly easing funding pressures and interest costs for local governments, Lan added.

As of end-2023, China had a total hidden debt balance of 14.3 trillion yuan, which the authorities plan to trim to 2.3 trillion yuan by 2028, according to the ministry.

Dedicated efforts will be made to strip government financing functions from local government financing vehicles and facilitate their market-oriented transformation, to prevent State-owned enterprises and public institutions from simply adopting "new disguises" to continue their debt-fueled practices, Lan said.

By making the prevention of illegal and irregular borrowing a top priority in fiscal oversight, the government is sending a clear message that it will not tolerate any further accumulation of hidden liabilities, Lan added.

That said, the Government Work Report also highlighted the need to refine existing assessment and control measures, emphasizing "a dynamic adjustment of the list of high-risk regions", to enable new investment opportunities in these areas.

The inclusion or exclusion of specific regions on the high-risk list will be subject to periodic review, taking into account evolving economic conditions, fiscal revenue and debt servicing capabilities, said Wen Laicheng, a professor at Central University of Finance and Economics.

"This dynamic adjustment mechanism is designed to prevent overly restrictive government investment policies from inadvertently hampering local economic development," Wen said.

The government remains committed to encouraging local government investment, but with a focus on optimizing investment structure and efficiency as well as guiding investment toward emerging sectors, such as the low-altitude economy and artificial intelligence, that are well-suited to regional comparative advantages, Wen added.