China’s local governments spent a record RMB 1.23 trillion ($174 billion) on bond interest payments last year, up nearly 10% from 2022, official data showed Tuesday, reports Caixin. Outstanding local government debt has also been steadily climbing over the past few years, reaching RMB 40.74 trillion by the end of 2023—a 16% year-on-year increase, according to data published by the Ministry of Finance.
This amount included general bonds, whose proceeds are used to pay for nonprofit projects with no revenue, and special-purpose bonds, which raise funds mainly for infrastructure investment.
It did not include local authorities’ off-the-books borrowings, which are estimated in the tens of trillions of yuan and include bonds issued by local government financing vehicles (LGFVs), state-owned companies set up to finance local investment such as building infrastructure.