China Devotes $1.4 Trillion to Fixing Its Hidden Debt Problem
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China unveiled a 10 trillion yuan ($1.4 trillion) package Friday for its local governments to deal with their immense hidden debt.
The package shows how the central government is getting more serious about defusing the risks that the off-the-books debt poses to the financial system.
The standing committee of the National People’s Congress (NPC), China’s top legislature, approved an additional quota of 6 trillion yuan for local governments to bring their hidden debt onto the books, Xu Hongcai, a deputy director of the NPC’s financial and economic affairs committee, announced at a press briefing that day.

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- China introduced a 10 trillion yuan package to help local governments manage hidden debts, with an additional 6 trillion yuan quota approved for 2024-2026 SPBs.
- The package aims to cut hidden debt from 14.3 trillion yuan to 2.3 trillion yuan by 2028, also saving 600 billion yuan in interest over five years.
- Local governments can now use new SPB proceeds to address hidden debt, marking a policy shift to support financial stability and economic growth.
- More than 2.2 trillion yuan in 2023:
- Local government allowed to use bond quotas to resolve hidden debt and pay overdue arrears to businesses.
- Last year, 2023:
- The central government rolled out a package of measures to resolve risks associated with hidden debt.
- By the end of 2023:
- China's local governments had 14.3 trillion yuan of outstanding hidden debt.
- 2024:
- The central government allowed local governments to use a bond quota of 1.2 trillion yuan to resolve hidden debt and pay overdue arrears.
- Starting in 2024:
- Local authorities allowed to use 800 billion yuan of proceeds annually from new SPBs to deal with hidden debt in a five-year initiative.
- November 8, 2024:
- The standing committee of the NPC approved an additional quota of 6 trillion yuan for local governments to bring hidden debt onto the books.
- Friday, November 8, 2024:
- China unveiled a 10 trillion yuan package for local governments to handle hidden debt.
- From 2024 to 2026:
- 6 trillion yuan will be added to special-purpose bond quotas for local authorities to issue, averaging 2 trillion yuan per year.
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