China's top legislative body approves bill to raise local government debt ceilings

China's Vice chairman of the National People's Congress (NPC) Financial and Economic Affairs Committee announced on Friday that Beijing approved a bill to raise local government debt ceilings to replace existing hidden debts.

Key takeaways

China plans to raise local govt debt ceiling by 6 trln yuan.

New debt quota will help replace existing debt.

Move to swap hidden debt will help resolve local debt risks.

NPC approved plans to increase local debt ceiling.

Will speed up overhaul of local govt financing vehicles to curb new debt.

Arranging 6 trln yuan in local govt debt quota to resolve 'hidden' debt is a major policy decision.

2 trln yuan will be used for debt swap each year.

China's 'hidden' local govt debt at 14.3 trln yuan at end-2023.