China’s local governments issued roughly 9.1 trillion yuan ($1.25 trillion) in bonds between January and October, the highest on record for this period, according to data from the Ministry of Finance. Nearly 60 percent of the funds went toward repaying existing obligations, underscoring mounting fiscal pressure at the local level.
A prolonged slump in the real estate market has sharply reduced land sales—traditionally a major revenue source—leaving many local authorities struggling to balance their budgets. According to a November 4 report from Yicai, bond issuance reached 9.1062 trillion yuan ($1.25 trillion), up 23 percent year-on-year, with much of the borrowing clustered in the first half of the year.
Of the total, new local government bonds amounted to about 4.7 trillion yuan ($646 billion), a modest 2 percent annual increase. Refinancing bonds surged 58 percent to 4.4 trillion yuan ($605 billion), reflecting policies rolled out by Beijing last October to help ease debt risks. These refinancing bonds are primarily used to roll over maturing debts, convert hidden liabilities into formal borrowing, and ease repayment pressure.
Local governments also issued some 1.25 trillion yuan ($172 billion) in special new bonds specifically aimed at resolving hidden debt and clearing overdue payments to companies. Combined with refinancing bonds, the amount dedicated to debt rollover reached 5.65 trillion yuan ($777 billion), accounting for 62 percent of total bond issuance during the period.
To further support local finances, the Ministry of Finance and the National Development and Reform Commission authorized an additional 500 billion yuan ($69 billion) in local government bonds in mid-October, including 300 billion yuan ($41 billion) to shore up fiscal capacity and 200 billion yuan ($27 billion) earmarked for eligible infrastructure projects.
Source: Central News Agency (Taiwan), November 4, 2025
https://www.cna.com.tw/news/acn/202511040181.aspx