China Auditor Exposes Local Governments Faking Debt Cleanups

Some local governments in China have used deceptive tactics to mask billions of yuan in hidden debt, undermining Beijing’s sweeping campaign to defuse financial risks, the country’s top auditor revealed.

While official data show all local governments’ hidden debt balances dropped to 10.5 trillion yuan ($1.5 trillion) by the end of 2024, the audit findings highlight Beijing’s persistent struggle to enforce financial discipline.