China’s Ministry of Finance said Friday that local governments will be able to use 550 billion yuan ($82 billion) in previously unused debt quotas to cover budget gaps and finance infrastructure projects.
The move draws on borrowing capacity already authorised under the country’s debt system. It frees up space without fresh approval from the national legislature.
Counties and districts will receive 300 billion yuan to strengthen their general budgets. A further 250 billion yuan in special debt has been earmarked for key projects in Q4 2026.
The newly available 550 billion yuan amounts to approximately 40% of unused quota estimated at roughly 1.4 trillion yuan. That estimate takes account of about 1.1 trillion yuan in bonds planned for the year but still unissued.
By the end of September 2026, outstanding local debt had reached 60.7 trillion yuan. The national legislature had approved a local government debt limit of 63.2 trillion yuan for 2026.
The ministry’s decision follows earlier releases of unused capacity. The central government mobilised more than 500 billion yuan in special debt limits for project construction in September 2022. It mobilised 400 billion yuan in October 2024 to help localities deal with existing debt and corporate arrears. In mid-2025, it made another 500 billion yuan in special debt limits available to support local financial capacity.
The announcement identifies funding for counties, districts and key projects, though it does not specify which local governments or projects will receive the money.
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