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 reduction 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, reveals the latest developments.

The report states that, in reviewing the achievements of 2025, significant progress has been made in resolving risks in key areas. The resolution of local government debt risks has been steadily advanced. Refinance bonds worth 2 trillion yuan were issued to replace existing hidden debts, reducing the average interest cost by over 2.5 percentage points after replacement. An additional 800 billion yuan of special local government bonds were arranged to supplement local government funds and support debt reduction. Over 82% of financing platforms have exited, and the outstanding operational financial debt of financing platforms has decreased by more than 74%.

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