According to an article from Yicai.com, in order to reign in the exploding local government debt that has been growing out of control, Xi Jinping recently announced that the municipal government must strictly control the debt ceiling and the related officials must have lifetime accountability for the debt. Xi made the announcement during the finance conference which was held last week. The lifetime accountability will prevent the officials from shirking their responsibility once they have retired, According to the article, local debt has risen rapidly in recent years because officials seek GDP growth as a measure of their political achievement. The article went on the report that the Ministry of Finance has set up a debt ceiling in order to ease the local debt risk. By the end of 2016, local debt was at 15.32 trillion yuan (US$2.27 trillion) which was less than the 17.19 trillion (US$2.54 trillion) debt ceiling. The debt ceiling for 2017 was set at 18.82 trillion yuan (US$2.78 trillion). Meanwhile, in 2014, the State Council started to include the local debt as one of the measures for party official’s political achievement.
Source: Yicai.com, July 16, 2017