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Local government debt in China hit 15.86 trillion yuan (US$2.4 trillion) by the end of June 2017, slightly higher than 15.32 trillion yuan (US$2.3 trillion) in 2016, but lower than the government’s target ceiling of 18.82 trillion yuan (US$2.8 trillion) for 2017. China’s local government debt rate hit 80.5 percent of the national ceiling last year, and the provinces of Guizhou and Liaoning exceeded 180 percent of their provincial ceiling, crossing the warning line of 100 percent. China has introduced a package of measures to reduce local government debt risks by implementing a new Budget Law, setting debt ceilings for local governments, and unveiling a debt-for-bond swapping program. Experts warned of the urgency of strengthening local government debt management by stopping local governments from borrowing in disguised forms, including government service procurement and cooperation between government and private investors.
