China’s 6 trillion yuan hidden debt swap reaches 98% completion, focus shifts to LGFV operating debt
China's three-year program to swap 6 trillion yuan of hidden local government debt with special refinancing bonds has reached 98% issuance as of late September 2026, with 1.88 trillion yuan of the 2026 quota issued. The official hidden debt balance fell from 14.3 trillion yuan at end-2023 to 6.5 trillion yuan at end-2025. As the swap nears completion, policymakers and analysts are shifting attention to the operating debt of local government financing vehicles (LGFVs), estimated at 3-5 trillion yuan remaining.
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China's 6 Trillion Yuan Hidden Debt Swap Nears Completion at 98% Progress
China's three-year program to swap 6 trillion yuan of hidden local government debt with special refinancing bonds is nearing completion, with 98% of the total quota issued as of September 24, 2026, according to data from corporate early warning platform. The 2026 tranche of 2 trillion yuan is 95% issued. The program, approved by the National People's Congress in November 2024, aims to replace high-cost, short-term hidden debt with low-interest, long-term government bonds, saving an estimated 600 billion yuan in interest over five years. Among 31 issuing regions, 23 have completed over 90% of their 2026 quotas, with Jiangsu leading at over 800 billion yuan issued over three years. However, progress lags in Guizhou, Hunan, Hubei, Shaanxi, and Heilongjiang due to complex debt structures and stricter compliance reviews. Finance Ministry Vice Minister Liao Min stated that the '15th Five-Year Plan' period will focus on preventing new hidden debt as an 'iron discipline' and building a long-term government debt management mechanism. Experts note that while debt reduction is effective, challenges remain in managing operating debt risks of local government financing platforms, whose numbers and debt have fallen over 70% since early 2023.
Read sourceChina's 6 Trillion Yuan Hidden Debt Swap Nears Completion at 98% Progress
According to data from corporate early-warning platform Qiyeyujing, as of September 24, 2026, China's three-year program to swap 6 trillion yuan of hidden local government debt with special refinancing bonds has reached 98% completion. The 2026 annual quota of 2 trillion yuan is 95% utilized, with 1.88 trillion yuan issued. The program, approved by the National People's Congress in November 2024, allocates 2 trillion yuan annually from 2024 to 2026 to replace high-cost, short-term hidden debt with low-interest, long-term government bonds. The Ministry of Finance estimates the swap will save approximately 600 billion yuan in interest over five years. Among 31 issuing regions, 23 have completed over 90% of their 2026 quotas, with Jiangsu, Sichuan, and six others at 100%. Jiangsu leads nationally with over 800 billion yuan in cumulative issuance. However, provinces including Guizhou, Hunan, Hubei, Shaanxi, and Heilongjiang lag behind due to complex debt structures and stricter compliance reviews. Finance Vice Minister Liao Min stated in August 2026 that the '15th Five-Year Plan' period will focus on preventing new hidden debt as an 'iron discipline' and building a long-term government debt management mechanism.
Read sourceChina's 6 Trillion Yuan Swap Bond Issuance Nears Completion, Focus Shifts to Operating Debt
According to a report by Cailianshe via Tencent Stock, China's three-year, 6 trillion yuan program to swap local government hidden debt is nearly complete, with 98% of the bonds issued. Data from enterprise early warning shows that 1.88 trillion yuan of the 2 trillion yuan 2025 quota has been issued, with eight regions including Jiangsu and Sichuan fully utilizing their quotas. The official hidden debt balance has fallen from 14.3 trillion yuan at end-2023 to 6.5 trillion yuan at end-2025, per Ministry of Finance data. Analysts from Everbright Securities and Huatai Securities expect the remaining hidden debt to be manageable. The next phase of debt resolution will focus on the operating debt of local government financing vehicles (LGFVs), which the PBOC reported fell 62% from March 2023 to September 2025. The Central Economic Work Conference in December 2025 called for optimizing debt restructuring and swap methods to resolve LGFV operating debt risks. Huatai estimates 3-5 trillion yuan of such debt remains, to be addressed through platform delisting and financial institution support rather than full debt clearance.
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China's 6 Trillion Yuan Swap Bond Issuance Nears Completion, Focus Shifts to Operating Debt
According to a report by Cailianshe via Tencent Stock, China's three-year, 6 trillion yuan program to issue special refinancing bonds for swapping local government隐性债务 (hidden debt) is nearly complete, with 98% of the quota already issued. Data from corporate early warning systems shows that 1.88 trillion yuan of the 2 trillion yuan 2025 quota has been issued, with 23 of 31 issuing regions completing over 90% of their quotas. The official hidden debt balance has dropped from 14.3 trillion yuan at end-2023 to an estimated 6.5 trillion yuan by end-2025, with analysts predicting it could fall to around 2.6 trillion yuan by end-2026. As the large-scale swap program winds down, analysts and policymakers are shifting focus to the operating debt of local government financing vehicles (LGFVs), which stood at about 14.8 trillion yuan at end-2024. The Central Economic Work Conference in December 2025, for the first time, called for optimizing debt restructuring and swap methods to resolve LGFV operating debt risks. Analysts from Huatai Securities estimate 3-5 trillion yuan of such debt remains, to be addressed through platform delisting and financial institution support rather than full debt clearance.
China's 6 Trillion Yuan Swap Bond Issuance Nears Completion, Focus Shifts to Operating Debt
According to a report by 财联社 via Tencent Stock, China's three-year, 6 trillion yuan program to swap local government隐性债务 (hidden debt) is nearly complete, with 98% of the quota issued as of late September 2025. Official data shows that the stock of hidden debt has fallen from 14.3 trillion yuan at end-2023 to 6.5 trillion yuan at end-2025. Analysts from Everbright Securities and Huatai Securities expect the remaining hidden debt to be manageable, with the annual swap quota likely to be reduced without major impact. The article highlights that the next phase of debt resolution will focus on经营性债务 (operating debt) of local government financing vehicles (LGFVs), which the People's Bank of China reported at about 14.8 trillion yuan at end-2024. The Central Economic Work Conference in December 2025 for the first time called for measures to resolve operating debt risks of LGFVs. Analysts from China Chengxin Credit Rating and Huatai Securities estimate that 3-5 trillion yuan of such debt remains, to be addressed through platform delisting and debt restructuring rather than full write-offs.