New Trends in Local Debt: Multiple Regions Complete Hidden Debt Clearance, Accelerate Debt Repayment and "Platform Withdrawal" This Year

As the 2028 target for clearing existing implicit debt and the deadline for local government financing platform companies (hereinafter referred to as “urban investment companies”) to complete their “platform withdrawal” tasks in June 2027 approach, the work to resolve local implicit debt has entered a critical stage. The reporter’s review of recent government work reports and fiscal budget reports released by various regions shows that over the past year, many areas announced the clearing of local implicit debt, with a significant reduction in the number of urban investment companies, and some regions exceeding their debt resolution targets. In 2025, the risk of local government debt in China further contracted, and after debt replacement across regions, the average interest cost of debt decreased by more than 2.5 percentage points. According to incomplete statistics by the reporter, since 2026, at least 34 cities nationwide have announced the latest progress on implicit debt clearance, including Siping City and Songyuan City in Jilin Province, and Shuangyashan City in Heilongjiang Province, which announced last year that they had achieved implicit debt clearance. “As state-owned enterprise reform advances deeply and the requirements for debt risk prevention and control continue to increase, many regions are expressing more urgent demands for ‘platform withdrawal’ by urban investment companies. An increasing number of regions will clear implicit debt ahead of schedule, and the work to resolve implicit debt is nearing completion,” said Zhou Lijun, Executive Director of the Public Utilities Department at Dongfang Jincheng. (People’s Financial News)