On August 24th, 20 15, the State Council asked the National People's Congress Standing Committee (NPCSC) to consider and approve the proposal of local government debt limit for 20 15, which marked that China started the management of local government debt limit according to law. The 20 15 local government debt limit submitted for consideration this time consists of two figures, one is the ending balance of local government debt at the end of 20 14, and the other is the new local government debt limit approved by the National People's Congress in March 20 15.
Lou Jiwei, Minister of Finance, said that local government debt limit management is an important part of regulating local government debt management. After the National People's Congress Standing Committee (NPCSC) approves the local government debt limit of 20 15, the State Council will verify the local debt limit within the approved limit. Local governments propose local debt limits within the limits approved by the State Council, and report them to the Standing Committee of the People's Congress at the same level for approval, and borrow and repay debts within the approved limits.
Liao Xiaojun, vice chairman of the Financial and Economic Committee of the National People's Congress, suggested establishing a system of reporting local government debts to the National People's Congress and establishing an open and perfect local government debt evaluation system. Typical areas and responsible persons who borrow money in violation of regulations should be publicly exposed, seriously accountable, form a warning effect and establish legal authority.
Liao Xiaojun also suggested establishing an accountability mechanism for local and individual violators. For some areas with early warning of debt risk indicators and areas with high debt risk, various ways should be taken to repay debts and effectively reduce risks. For special bonds that cannot be repaid, it is necessary to establish a debt default disposal mechanism and strengthen market constraints. Strictly distinguish between corporate bonds and government bonds, and it is strictly forbidden to include corporate bonds such as urban investment bonds into local government debts. We should properly handle all kinds of contingent debts and resolutely put an end to all kinds of illegal guarantees and disguised debts.
20 15 On August 29th, the 16th meeting of the 12th the National People's Congress Standing Committee (NPCSC) voted to pass the Resolution of the National People's Congress Standing Committee (NPCSC) on Approving the Proposal of the State Council on Approving the Debt Limit of Local Governments in 20 15. According to this plan, the local government debt limit of China will be locked at 16 trillion yuan in 20 15 years (the same below), and the estimated debt ratio is 86%.
The approved local government debt limit is 20 15 16 trillion yuan, which is actually the debt that local governments have the responsibility to repay at present. The quota consists of two parts, one is the balance of national local government debt at the end of 20 14/5.4 trillion yuan, and the other is the new quota of local government debt approved by the National People's Congress in March this year of 0.6 trillion yuan.