RMB. Photo: iStock

Finance Minister Liu He said the government will rein in local government debt through five different steps going forward, China Securities Journal reported.

Firstly, resolutely curb the increase in hidden debt, urge the rectification of illegal behavior among government investment funds, public-private partnership and government purchase of services, as well as strictly prohibit all kinds of illegal guarantees and disguised debt.

Secondly, properly resolve the hidden debt stock. Provincial governments will take overall responsibility for debt within their jurisdictions, and local governments below the provincial level should bear their respective responsibilities.

Thirdly, further improve local construction projects and fund management, strengthen financial constraints and effectively dampen projects without repayment capacity.

Fourthly, continue to maintain high-pressure supervision, establish a cross-departmental disciplinary mechanisms, and extend proper blame on local governments, state-owned enterprises, financial institutions and intermediaries over illegal financing guarantees.

Lastly, study and introduce institutional measures to speed up the transformation of financing platform companies and local government debt information disclosure, and accelerate the reform of the comprehensive financial reporting system.