Latest developments in local government debt: Over 82% of financing platforms have exited, and operational financial debt has decreased by over 74%

Caixin: How are the series of debt-for-equity swap measures launched in November 2024 progressing? The “Report on the Implementation of the 2025 National Economic and Social Development Plan and the Draft 2026 Plan,” submitted for review at the Fourth Session of the 14th National People’s Congress on March 5, discloses the latest developments.

The report states that in reviewing the achievements of 2025, significant progress has been made in risk mitigation in key areas. The resolution of local government debt risks has been steadily advanced, with 2 trillion yuan of refinancing bonds issued to replace existing hidden debts. After replacement, the average interest cost has decreased by more than 2.5 percentage points. Additionally, 800 billion yuan of new local government special bonds have been arranged to supplement local government funds and support debt resolution. Over 82% of financing platforms have exited, and the outstanding operational financial debt of financing platforms has decreased by more than 74%.

Previously, Pan Gongsheng, Governor of the People’s Bank of China, introduced in a report to the Standing Committee of the National People’s Congress at the end of October 2025 that by the end of September 2025, the number of financing platforms and the scale of their operational debt had decreased by 71% and 62%, respectively, compared to March 2023. Comparing the two, in the fourth quarter of 2025, the decline in the number of financing platforms and their operational debt exceeded 10% compared to March 2023, indicating that the pace of local debt resolution remains relatively rapid.